South Africa’s Competition Commission has approved the proposed merger of
The decision paves the way for the creation of South Africa’s largest gold producer, and the world’s fifth biggest, with annual production pegged at 4.1 million oz.
Under the planned merger, African Rainbow shareholders will receive two Harmony shares for every three shares held. Harmony will mint 63.7 million new shares to complete the transaction. Also, African Rainbow will pay out a special dividend of R5 per share before the merger.
The plan is to go before the shareholders of each company in August. Pending their approval, the merger deal will be submitted for court sanctioning in early September.
The new Harmony will operate mines in all of South Africa’s major gold-producing regions, including the Free State, where operations will be consolidated into a single operating unit.
Harmony and African Rainbow are already partners in the Free Gold joint venture, and together they recently acquired
As well, Harmony has agreed to acquire an 11.5% stake in Avmin’s 42%-owned subsidiary, Avgold, from Anglo in exchange for 6.9 million, or 3.8%, of its own shares.
Avgold’s main asset is the Target gold mine in the Free State, which is expected to produce 350,000 oz. a year at a cash cost below US$180 per oz.
Anglo says it will turn around and sell the Harmony shares for US$80 million.
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