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TORONTO – Barrick Gold Corp. chairman Peter Munk levelled a pointed criticism of Newmont Mining Corp. on Thursday, saying he has struggled to strike a merger with his U.S. rival because the company is extremely bureaucratic and not shareholder-friendly.
Mr. Munk, 86, hoped to reach a deal to buy Newmont before he officially retires at Barrick’s annual meeting next month. But Toronto-based Barrick has been frustrated over years of negotiations by what he calls “cultural differences.”
He said that Newmont is an extremely conservative and risk-averse company, which makes negotiations very difficult. As one example, he pointed out that Newmont shut reporters out of its annual meeting this week after news of the talks leaked. He said Barrick would never consider doing that.
“That’s the cultural difference. That’s the kind of people they are, and that’s why it’s so difficult to make a deal,” he said in an interview. “They are not shareholder-friendly.” Even though they operate next to each other in Nevada, Barrick and Newmont are like oil and water.
Barrick has existed for only 31 years, but became the world’s largest gold producer through a dizzying series of acquisitions (some better than others), and the discovery of the giant Goldstrike mine on a Nevada property that Newmont passed up. The company has always prided itself on having a highly entrepreneurial and aggressive culture.
Newmont has been around for almost a century, but has been much quieter on the M&A front despite its dominant position in Nevada. Mr. Munk compared Newmont’s culture and bureaucracy to Inco Ltd. and other old Canadian resource companies that got acquired.
“They have a different mentality than we do,” he said.
That has not stopped Barrick and Newmont from trying to merge numerous times over the years. Mr. Munk said he spent an entire year working with the late Jimmy Goldsmith (who was Newmont’s controlling shareholder) to put the miners together without success. Newmont also initiated some negotiations, but they could never overcome the personality clashes.
“It just never worked out,” Mr. Munk said.
He hopes the current negotiations lead to a friendly deal. But even if they don’t, he believes a merger is “just a matter of time” because the cost savings are so attractive.
For the rest of this article, click here: http://business.financialpost.com/2014/04/24/barrick-chair-peter-munk-blasts-newmonts-company-culture-as-miners-struggle-to-reach-deal/