South Africa’s Gold Fields Buys Canada’s Yamana in $6.7 Billion Deal

With the acquisition, Gold Fields will add projects in Canada, Brazil, Argentina and Chile to its mines in South Africa, Ghana, Australia and Latin America. The combined company, which will be based in Johannesburg, will have a market capitalization of $15.9 billion, making it the world’s fourth-largest gold miner, behind

Newmont Corp.

,

Barrick Gold Corp.

and

Agnico Eagle Mines Ltd.

Gold Fields Chief Executive

Chris Griffith

said Yamana was an attractive takeover because of its existing mines and pipeline of projects in the Americas. Gold Fields has in recent years worked to diversify its operations outside of South Africa, where it faces declining and increasingly hard-to-reach gold reserves and other issues.

Apart from Gold Fields’ Salares Norte mine in Chile, which is expected to start production next year, “we don’t have any projects in the pipeline or any way of countering the decline in production that is due to come from Gold Fields over the next number of years,” Mr. Griffith said.

Gold Fields shares on the

Johannesburg Stock Exchange

were down around 11% on Tuesday afternoon. Mr. Griffith said the drop was in line with the company’s expectations given the all-stock deal placed a premium of 34% on Yamana’s recent share price.

Under the deal, which Gold Fields said has been approved by both companies’ boards, Gold Fields shareholders will own around 61% of the company’s stock, while Yamana holders will own the remaining 39%.

Write to Gabriele Steinhauser at [email protected] and Ian Walker at [email protected]

With the acquisition, Gold Fields will add projects in Canada, Brazil, Argentina and Chile to its mines in South Africa, Ghana, Australia and Latin America. The combined company, which will be based in Johannesburg, will have a market capitalization of $15.9 billion, making it the world’s fourth-largest gold miner, behind

Newmont Corp.

,

Barrick Gold Corp.

and

Agnico Eagle Mines Ltd.

Gold Fields Chief Executive

Chris Griffith

said Yamana was an attractive takeover because of its existing mines and pipeline of projects in the Americas. Gold Fields has in recent years worked to diversify its operations outside of South Africa, where it faces declining and increasingly hard-to-reach gold reserves and other issues.

Apart from Gold Fields’ Salares Norte mine in Chile, which is expected to start production next year, “we don’t have any projects in the pipeline or any way of countering the decline in production that is due to come from Gold Fields over the next number of years,” Mr. Griffith said.

Gold Fields shares on the

Johannesburg Stock Exchange

were down around 11% on Tuesday afternoon. Mr. Griffith said the drop was in line with the company’s expectations given the all-stock deal placed a premium of 34% on Yamana’s recent share price.

Under the deal, which Gold Fields said has been approved by both companies’ boards, Gold Fields shareholders will own around 61% of the company’s stock, while Yamana holders will own the remaining 39%.

Write to Gabriele Steinhauser at [email protected] and Ian Walker at [email protected]