AngloGold to Buy Sukari Mine for $2.5bn

AngloGold Ashanti has agreed to acquire Centamin in a stock and cash deal worth approximately £1.9bn ($2.5bn).

Under the deal, AngloGold will take over Egypt’s Sukari mine, often considered one of the world’s best gold mines and not owned by any major producer. However, the mine has faced operational and political challenges since the uprising that led to the ouster of former President Hosni Mubarak.

In a statement issued on Tuesday, AngloGold said that the cash-and-shares offer represents a 37% premium to Centamin’s closing share price on September 9.

Following the announcement, AngloGold shares fell 9.8% in Johannesburg, their largest daily drop in three years, while Centamin shares jumped 25% in London.

This acquisition is the latest indication that major gold producers are considering acquiring smaller rivals as gold prices reach near record highs. Last month, Gold Fields agreed to buy Canada’s Osisco Mining in a $1.6 billion deal.

According to Analyst Emmanuel Mungeri of Bloomberg Intelligence, M&A activity in the sector will increase as producers seek to maintain production.

Adding Sukari to AngloGold’s assets, which stretch from Australia to the Democratic Republic of Congo, will increase its annual output by about 450,000 ounces, taking its annual output to more than 3 million ounces.

This acquisition also marks AngloGold’s further move away from South Africa, following the sale of its last mine in the country in 2020. The company, which emerged from the mining empire created by Ernest Oppenheimer, has since moved its headquarters to Denver and its primary listing to New York.

After the deal closes, AngloGold shareholders will own about 83.6% of the company, while Centamin investors will own about 16.4% of the capital.