In a move that will reshape the global gold mining landscape, AngloGold Ashanti (AU) has announced its intention to acquire Centamin (CELTF) in an all-share deal worth $2.5 billion. This acquisition will catapult the combined entity to the position of the fourth-largest gold producer worldwide.
AngloGold CEO Alberto Calderon highlighted the strategic value of the deal, stating, “This transaction will add a Tier 1 asset to our portfolio and is accretive from day one.” The acquisition’s primary focus is on Centamin’s flagship asset, the Sukari gold mine, located in Egypt. Sukari has earned a reputation as a Tier 1 asset, having yielded over 5.9 million ounces of gold since its launch in 2009. Its consistent output, coupled with a low-cost structure, has resulted in all-in-sustaining costs of $1,290 per ounce. The mine’s longevity is another significant factor, with estimated reserves projected to last for another 20 years, ensuring a stable future for both companies’ production and financial well-being.
Under the terms of the agreement, Centamin shareholders will receive 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share, resulting in 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 upon completion, Centamin shareholders will hold 16.4% of the enlarged AngloGold Ashanti.
AngloGold anticipates the deal to generate free cash flow accretion in its first full year and immediate net asset value accretion, further strengthening its financial performance. The acquisition will contribute an additional 450,000 ounces of gold annually from Sukari to AngloGold’s output, pushing its total production above 3 million ounces per year. By adding a Tier 1 mine in another jurisdiction and expanding its market presence, AngloGold is joining the ranks of leading 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 enhanced trading liquidity. The deal’s predominantly equity-based structure also ensures balance sheet stability for AngloGold as it continues to pursue its growth ambitions.
Centamin’s board has unanimously endorsed the transaction and has committed to recommending the deal to its shareholders. Subject to shareholder and regulatory approvals, the acquisition is anticipated to be finalized in the coming months.
