Gold Fields Limited (GFI and Yamana Gold Inc. YRI AUY entered into a definitive agreement.
What Happened: Under the agreement, Gold Fields will acquire all of the outstanding common shares of Yamana. Yamana shares will be exchanged at a ratio of 0.6 of an ordinary share in Gold Fields or 0.6 of a Gold Fields ADS for each Yamana Share.
The deal implies a valuation for Yamana of $6.7 billion and represents a premium of 33.8% to the 10-day Volume-Weighted Average Price of Yamana's Shares of $5.20 on May 27, 2022.
Gold Fields Shareholders and Yamana Shareholders will own ~61% and 39% of the combined group, respectively.
Why It's Important: The acquisition significantly strengthens the ability of the combined company to deliver on Gold Fields' three strategic pillars: maximizing asset potential, advancing ESG commitment, and growing the value and quality of its asset portfolio.
The transaction has been approved by the Board of both Gold Fields and Yamana and is expected to close in the second half of 2022.
Gold Fields will remain headquartered in Johannesburg.
Gold Fields had $524.7 million in cash as of December 2021.
Following the completion of the transaction, the Gold Fields Shares will continue to trade on the JSE, and the Gold Fields ADSs will continue to be listed on the NYSE, while the Yamana shares will be delisted from TSX, NYSE, and LSE.
Price Action: AUY shares are trading higher by 15.67% at $5.17 and GFI lower by 11.23% at $10.83 during the premarket session on Tuesday.
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