South African miner Gold Fields (JSE, NYSE: GFI) is buying Canada’s Yamana Gold (TSX: YRI)(NYSE: AUY) in an all-share deal worth $6.7 billion, which will make it the world’s fourth largest gold producer.
Under the terms of the deal, Yamana’s shareholders will receive 0.6 of a Gold Field share for each outstanding share in Yamana, representing a 34% premium to its average share price over the past 10 days.
The combined company, which will be based in Johannesburg, will have a market capitalization of $15.9 billion. Gold Fields shareholders will own around 61% of the miner’s stock, while Yamana holders will own the remaining 39%.
The move fits Gold Fields’ ambitions of expanding across the Americas, particularly in the Southern Hemisphere, despite investor concerns over populist policies and risks of higher mining taxes there.