Goldcorp to buy Andean Resources for $3.42 billion
By ROB GILLIES (AP) – 16 minutes ago
TORONTO — Canada's Goldcorp Inc. said Friday it has agreed to buy Andean Resources Ltd. for about 3.6 billion Canadian dollars (US$3.42 billion), trumping a rival bid from Eldorado Gold Corp.
The acquisition would give Goldcorp, the world's second-largest gold producer by market capitalization, access to Andean's Cerro Negro gold project in Argentina, which is said to have a significant amount of gold and silver.
The Goldcorp-Andean deal has been approved by both companies' boards but requires approval by a majority of Andean shareholders. The companies expect the deal to close later this year or in early 2011.
The announcement came shortly after Canada's Eldorado made an offer of 3.4 billion Canadian dollars (US$3.2 billion) for the company.
Andean is based in Utah and is listed on the Toronto and Australian stock markets. It acquired the Cerro Negro gold deposit in southern Argentina in 2004.
Wayne Hubert, Andean's CEO, said the Goldcorp deal benefits both companies and allows for the development of Cerro Negro into a key gold project.
"The Andean board of directors strongly believes that the shareholders of both parties will benefit from this business combination well into the future," Hubert said in a statement.
Under terms of the Goldcorp deal, each Andean common share will be exchanged for 0.14 Goldcorp shares or a cash payment in the amount of 6.50 Canadian dollars ($6.17) per share.
The maximum cash consideration will be 1 billion Canadian dollars ($948.6 million).
Shareholders can choose stock, cash or a combination of the two.
Paul Wright, president and CEO of Eldorado, said Eldorado had been looking at buying Andean for the past two years and had taken its offer to shareholders after the companies failed to reach an agreement.
Earlier this year, Goldcorp also beat out Barrick Gold Corp., the world's largest gold producer, when it bought a controlling interest in the El Morro gold-copper project in Chile from junior miner New Gold Inc.
Andean's Cerro Negro gold project has indicated resources of 2.54 million ounces of gold and 23.56 million ounces of silver.
"This transaction adds another key asset to Goldcorp's peer-leading growth profile and low-cost gold production pipeline," the company's president and CEO, Chuck Jeannes, said in a statement.
Jeannes added that the project allows Goldcorp to increase its gold resources by expanding existing deposits and exploring more areas that may have additional deposits.
If the transaction doesn't close, Andean will pay Goldcorp a termination fee equal to 1 percent of the aggregrate total offer made by Goldcorp.
Copyright © 2010 The Associated Press. All rights reserved.
THE THRILL OF VICTORY ;-) & THE AGONY OF DEFEAT ;-(
