Barrick Gold says Newmont Mining ends merger talks – by Rachelle Younglai (Globe and Mail – April 28, 2014)

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Barrick Gold Corp. said on Monday that Newmont Mining Corp. has decided to end their merger talks, a development that could lead Barrick to launch a hostile bid for its American rival.

The Toronto-based Barrick had been trying to renew talks with Colorado-headquartered Newmont last week, a source had said. But Newmont’s board of directors decided to “terminate” their discussions, Barrick said.

“Although Barrick believes the interests of shareholders are best served through the completion of this business combination, Newmont’s board has determined that the interests of Newmont’s shareholders are best served by remaining independent,” Barrick said in a statement. Newmont had no immediate comment.

The companies, the world’s two largest gold producers, have discussed merging at least two other times over the last two decades.

The rout in the gold industry led to their recent discussions, with the miners identifying about $1-billion in cost savings.

The statement from Barrick on Monday was the first time one of the companies confirmed that they had been discussing a merger. Under the terms of their latest proposal, Barrick would have paid $13-billion in stock to buy the smaller gold producer, sources had said.

The companies had aimed to announce the merger before their annual shareholder meetings in April, but reached an impasse about a week ago. One of their roadblocks had been over what assets to spin out, sources had said. Another was over the divisions of power and governance of the combined company, another source said.

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