Barrick Gold to Acquire Homestake Mining in $2.3 Billion Deal
Barrick Gold
(ABX)
signed an agreement to acquire
Homestake Mining
(HM)
in a $2.3 billion stock swap that will create the world's second largest gold mining company.
The boards of both companies have already approved the deal. Barrick is offering 0.53 shares for each share of Homestake, which has about 263.3 million shares outstanding.
The pact values each share of Homestake, which is based in Walnut Creek, Calif., at $8.71. Homestake closed at $6.65 Friday, but recently gained 20% to $7.98. Toronto-based Barrick lost 5.5% to $15.53.
Barrick said the deal should save the company about $55 million a year starting in 2002. The acquisition of Homestake will give Barrick mines and exploration properties in the U.S., Canada, Chile and Australia.