Gold miners Agnico Eagle, Kirkland Lake propose $13.5 billion mega-merger – by Gabriel Friedman (Financial Post – September 29, 2021)

Agnico Eagle Mines Ltd. and Kirkland Lake Gold Ltd., largest and second-largest gold producers in Canada, on Tuesday announced an all-stock merger, valued at around $13.5 billion that creates a new gold mining giant with its center of gravity in Canada.

The merged entity would keep the Agnico Eagle name and produce about 2.5 of its 3.4 million ounces of gold per year from mines in Canada. The deal comes about one year after gold, a traditional safe haven in times of economic uncertainty, reached an all-time peak at US$2,067 per ounce in August 2020.

But in the past 12 months, the price of gold has slipped 7.75 per cent to US$1,738 per ounce, and investor enthusiasm for gold miners has dampened. The share prices of Agnico and Kirkland Lake stock have declined during that period by 39 per cent and 20.4 per cent, respectively, to $63.65 and $51.78.

Sean Boyd, chief executive of Agnico Eagle would become executive chairman of the merged entity, while Tony Makuch, chief executive of Kirkland Lake would retain his title. Both emphasized that the combination would create regional synergies and estimated at least $2 billion in savings during the next decade.

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