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Newmont Drops Merger Talks with Barrick

ABJ – A proposed massive merger between Canadian-based Barrick Gold and Newmont Mining of the U.S. has fallen apart on word the latter is no longer interested in a friendly buyout.  With that, speculation is already running rampant that Barrick may respond by launching a hostile takeover bid. It’s not known why Newmont’s board of directors chose to end discussions, but it came quite abruptly.

"Although Barrick believes the interests of shareholders are best served through the completion of this business combination, Newmont's board has determined that the interests of Newmont's shareholders are best served by remaining independent," Barrick said in a statement.  Newmont has not provided a formal reply to the media.

The companies are the two largest gold producers in the world. Initial motivation for the merger was identification of about $1 billion in cost savings.

It had previously been reported both companies wanted to announce the merger before their annual shareholder meetings this month. A major stumbling block had been what assets to spin out, and who would hold what power in the various comprehensive divisions.

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