anglogold makes $1.1bn ashanti move

I hold AGG.
It's interesting how these big guys are not exploring to find new deposits and have to buy other miners. An interesting crunch is coming up. Gold could get even more interesting.

Regards

Desmond

AngloGold makes $1.1bn Ashanti move
By Ken Warn
Published: August 4 2003 23:23 | Last Updated: August 4 2003 23:23


South Africa-based AngloGold on Monday night unveiled a near-$1.1bn agreed bid for Ashanti Goldfields of Ghana, a deal that would allow it to topple Newmont Mining as the world's biggest gold producer.


AngloGold, a unit of mining giant Anglo American, said the deal had the backing of London-based Lonmin, which holds almost 28 per cent of the equity. However, it awaits the approval of Ghana's government, which holds just under 17 per cent.

"This deal absolutely depends on the support of the government, both as a shareholder and as a regulator," said Bobby Godsell, AngloGold chief executive. "But, to do full justice to its potential, Ashanti needs a full partner and we believe we are that partner," he said.

The government of Ghana, which has appointed a group of advisers led by Société Générale to assess the bid, is expected to clarify its position by the middle of next month.

AngloGold is offering holders of one Ashanti ordinary share or global depositary receipt 0.26 AngloGold shares or American depositary receipts, representing a 4 per cent premium based on August 1 closing prices. The offer represents a 12 per cent premium on the May 15 close, prior to the announcement of talks. The deal values Ashanti at $1.089bn.

The deal would create a producer with mines in South Africa, Namibia, Zimbabwe, Tanzania, Mali, Ghana, Guinea, Australia and North America. About 80 per cent of production would come from Africa.

Approval of the deal would diversify AngloGold away from its base in South Africa, where investors have grown increasingly concerned over mining ownership legislation aimed at boosting the role of black ownership, and over the strength of the South African rand.

The combined company would have annual pro forma output of about 7.3m ounces of gold, slightly ahead of Denver-based Newmont and 27 per cent ahead of AngloGold on a standalone basis. The deal, which Mr Godsell referred to as a partnership rather than an acquisition, would create a group with 93.2m ounces of proven and provable reserves.

Sam Jonah, Ashanti chief executive and the most powerful black executive in African mining, would join the board of the merged group and play a role in the executive management, AngloGold said. "He will share with me the strategic leadership of the company," said Mr Godsell.