Talks to merge the world's largest goldmining companies, Barrick Gold and Newmont Mining broke down over the weekend amid minor disagreements that leave open the possibility a deal could be revived, reports say.
The companies had agreed to an all-stock merger and planned to announce the deal this week, insiders said. Barrick was to offer Newmont shareholders 13 per cent over Newmont's average trading price over the past 20 days.
The companies had reportedly agreed to all terms not related to a spin-off of Australian and New Zealand assets and had identified $1 billion a year in cost savings, mostly from their mines in Nevada. Toronto-based Barrick and Newmont of the US have a combined market value of almost $US33 billion ($35 billion) and operate on five continents. The merger talks follow gold's 28 per cent plunge in 2013, the most in three decades, which squeezed profits and spurred at least $US30 billion of write-downs by producers.
The merger plan hit a snag only when Barrick and Newmont failed to come to a complete agreement on which mines to include in the spinoff, it is believed. Unable to finalise a deal before a self-imposed April 21 deadline, the companies instead agreed to call off the plan for now.
Both companies wanted to have a deal announced before their annual meetings, one unnamed source said. Newmont's meeting is scheduled for April 23 and Barrick's for April 30. The two have tried to merge several times in the past and still have interest in getting a deal done.
Spokesmen for Barrick and Newmont both declined to comment on the merger talks. The breakdown in the latest talks was reported earlier by The Wall Street Journal.
Under the most recent plan, the combined company's chief executive would have been Newmont CEO Gary Goldberg, while Barrick co-chairman John Thornton would have been executive chairman.