AngloGold Ashanti To Acquire Centamin For $2.5B To Become Fourth Largest Gold Producer

AngloGold Ashanti AU has announced an intent to acquire Centamin CELTF in an all-share deal valued at $2.5 billion. The combined entity will be the fourth-largest gold producer globally.

"This transaction will add a Tier 1 asset to our portfolio and is accretive from day one," said AngloGold CEO Alberto Calderon. The acquisition focuses on Centamin's flagship asset, the Sukari gold mine, located in Egypt.

The Sukari mine is considered a Tier 1 asset, having produced over 5.9 million ounces of gold since its launch in 2009. It has a consistent output and low-cost structure with all-in-sustaining costs at $1,290 per ounce.

The mine is also known for its long life, with reserves estimated to last another 20 years, ensuring both companies' ongoing production and financial stability.

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Per the deal's terms, Centamin shareholders will receive 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share, implying a 163 pence ($2.14) per share offer. This represents a 36.7% premium to Centamin's closing price of 120 pence before the announcement.

The transaction is valued at 2.5 billion, and following completion, Centamin shareholders will hold 16.4% of the enlarged AngloGold Ashanti. AngloGold also expects the deal to be free cash flow accretive in its first full year and net asset value accretive immediately, further boosting its financial performance.

The acquisition adds Sukari's 450,000 annual gold ounces to AngloGold's output, pushing its production above 3 million ounces annually. By adding a Tier 1 mine in yet another jurisdiction and enhancing its position on the market, AngloGold is joining the ranks of top diversified gold producers like Newmont, Barrick, and Agnico Eagle.

Centamin shareholders will benefit from an upfront cash return and the opportunity to participate in a larger, more diversified gold producer with increased trading liquidity. The deal's predominantly equity-based structure also ensures balance sheet stability for AngloGold as it continues to fund its growth plans.

Centamin's board has expressed unanimous support for the transaction, with directors committing to recommend the deal to shareholders. Subject to shareholder and regulatory approvals, the acquisition is expected to be finalized in the coming months.

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