Ghana’s high court has approved the merger of
AngloGold will acquire the issued ordinary share capital of Ashanti at an exchange rate of 29 of its own shares for every 100 Ashanti shares. The deal is valued at US$1.3 billion, based on Anglo’s share price of US$33.84 on April 26.
A “stability agreement” with the government of Ghana protects the merged company from increases in the royalty regime and taxes.
The combined company, to be known as AngloGold Ashanti, will trade on the New York, London, Australian, Johannesburg, and Ghana stock exchanges, and on the Euronext in Paris and Brussels.
Meanwhile, AngloGold expects its first-quarter earnings to be “materially” lower than those in the final three months of 2003, owing to an 11% decline in gold production. (The Johannesburg Stock Exchange’s listing requirements define a movement of between 10% and 30% as material.)
The shortfall is attributed to a slow resumption of AngloGold’s South African operations following a shutdown at the end of 2003. Contributing factors include lower grades and mill throughputs at the Geita, Morila, and Cerro Vanguardia mines in Tanzania, Mali and Argentina, respectively. Also, earnings in the fourth quarter of 2003 benefited from an abnormal tax credit of US$7 million.
The company nonetheless expects to meet its 2004 production forecast of 5.3 million oz. gold (excluding contributions from Ashanti).
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