New Australian gold giant born as Northern Star acquires Saracen Mineral Holdings

The boards of Northern Star Resources and Saracen Mineral Holdings have approved a A$5.76 billion shares and cash deal that will create a global top-10 gold miner by market value.

The high-profile merger is set to create an Australia-based gold giant worth $16 billion, with Northern Star holding 64% of the combined entity and Saracen owning the remaining 36%.

Under the terms of the deal, Saracen shareholders will receive 0.3763 new fully paid ordinary shares in Northern Star for each share held, plus a special dividend of 3.8 Australian cents per share.

The new company, with mines in Australia and Alaska, is aiming for a 30% increase in gold production to 2 million ounces by 2027 – which would take it into the top seven of global producers.

Northern Star and Saracen already have strong links through the Super Pit joint venture in Western Australia, after both companies invested in a 50% stake in the country’s largest open pit gold mine last year.

“This deal gives the scale and liquidity to attract both gold and generalist investors,” said Bill Beament, executive chair of Northern Star. Beament will retain the position in the new entity until July 2021.

Meanwhile Saracen’s managing director Raleigh Finlayson – who will take over the same role in the combined group – said: “The pre-tax synergies alone are expected to be worth in order of A$1.5 billion to A$2.0 billion over the next 10 years.”