AngloGold Ashanti acquires Centamin for $2.5B to boost gold production

AngloGold Ashanti has announced its intention to acquire Centamin in an all-share deal valued at $2.5 billion. This acquisition is primarily focused on Centamin's flagship Sukari gold mine in Egypt, which has produced over 5.9 million ounces of gold since its inception in 2009. The mine is recognized for its consistent output and low-cost structure, with all-in-sustaining costs at $1,290 per ounce, and is projected to have reserves lasting another 20 years. The terms of the deal stipulate that Centamin shareholders will receive 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share, representing a 36.7% premium to Centamin's closing price prior to the announcement. Following the completion of the transaction, Centamin shareholders will own 16.4% of the enlarged AngloGold Ashanti. The acquisition is expected to enhance AngloGold's financial performance, being free cash flow accretive in its first full year. By adding Sukari's annual output of 450,000 gold ounces, AngloGold's total production will exceed 3 million ounces annually. This strategic move positions AngloGold among the top diversified gold producers globally, alongside companies like Newmont and Barrick. The deal is also seen as beneficial for Centamin shareholders, providing them with an immediate cash return and the chance to be part of a larger, more diversified entity. Centamin's board has unanimously supported the acquisition, committing to recommend it to shareholders. The transaction is subject to shareholder and regulatory approvals and is expected to be finalized in the coming months, marking a significant step in AngloGold's growth strategy.