S. Africa’s Gold Fields to acquire Aussie firm

South Africa’s Gold Fields will acquire Australia’s Gold Road Resources in an improved A$3.7 billion ($2.4 billion) deal, capitalising on soaring gold prices that are fuelling a global wave of consolidation in the sector.

The offer values Gold Road shares at A$3.40 each — a 14.5 per cent premium to the previous close — and sent its stock up as much as 12 per cent. The deal grants Gold Fields full control of the low-cost Gruyere mine in Western Australia, which it currently operates in joint venture with Gold Road.

This marks the third major Australian gold sector deal in six months, following Northern Star’s A$5 billion acquisition of De Grey Mining and Ramelius Resources’ A$4.2 billion tie-up with Spartan Resources. Analysts attribute the surge to record gold prices and a weaker Australian dollar, which are making local producers especially attractive.

Gold Fields CEO Mike Fraser said the company remains open to further acquisitions, including potentially Bellevue Gold, though its immediate focus will be on integrating Gold Road. He added that the acquisition also gives Gold Fields access to an extensive, unconsolidated land package around Gruyere with potential to lift production.

Goldman Sachs and Gresham advised Gold Road, while JPMorgan acted for Gold Fields.

Attribution: Reuters

Subediting: M. S. Salama