ANGLOGOLD, the South African goldminer, last night unveiled a $1.1 billion (£676 million) all-paper takeover of Ghana’s Ashanti Goldfields, which will create the world’s leading producer of the precious metal.
The deal has the approval of Ashanti’s board and its largest shareholder, Lonmin. It is conditional only on winning the support of the Ghanian Government, a 16.9 per cent shareholder, by September 30.
Bobby Godsell, AngloGold’s chief executive, said the transaction was driven by the need to deal with a widely forecast decline in gold production. It would link Ashanti’s strength in reserves with AngloGold’s knowledge of deep mining.
“We have one company here (Ashanti) that has tremendous resources, but not necessarily the capital and technology to do justice to them,” Mr Godsell said, adding: “Ashanti’s Obuasi mine looks like it extends to a depth beyond 1,000 metres, but it has until now only been planned for development above that level.”
AngloGold is offering Ashanti shareholders 13 per cent of the combined group. The deal will increase AngloGold’s reserves by 31 per cent to 93.2 million ounces, the largest amount held by any company.
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Mr Godsell will keep his role in the enlarged group, while Ashanti’s longstanding chief executive, Sam Jonah, will become president, taking responsibility for strategy formulation and external relations.
The two companies believe they can generate $15 million in savings from synergies. However, a further $44 million will be invested in Ashanti’s Obuasi mine to try to establish the depth and quality of its deep reserves.
Anglo American, AngloGold’s biggest shareholder, is also backing the deal. It will see its stake in AngloGold fall from 51.4 per cent to 44.5 per cent, although the company retains the right to go back over 50 per cent without making an offer to minority shareholders.
Ashanti shareholders are being offered 26 AngloGold shares for every 100 they hold.