Barrick Mining, one of the world's leading gold miners, is weighing a potential London listing for its African business. This strategic consideration could involve an all-share transaction with UK-listed Endeavour Mining, according to sources familiar with the discussions. If this deal goes through, the combined entity could achieve a market capitalisation of $30 billion.
These discussions, reported by Reuters, are currently in their early stages. No final decision has been made, and there is no certainty that a deal will materialise. Barrick Mining and Endeavour Mining have declined to comment on these developments.
This potential move aligns with a broader strategy by Barrick Mining to reshape its global operations. Earlier this year, the company announced plans to spin off its North American business with a primary listing in New York. Barrick's CEO, Mark Hill, has also indicated the company's intention to sell mines in African countries and other regions where it does not hold majority ownership but maintains management control. This strategy aims to reduce exposure to what Barrick considers risky regions, driven by investor demands for stronger returns.
The push to restructure follows Barrick's year-long dispute with Mali's military-led government. This conflict led to the ouster of Barrick's former CEO, Mark Bristow. The company has since settled the dispute, which highlighted the complexities of operating in certain African markets. Barrick's chairman, John Thornton, and CEO Hill are now guiding the company towards this new strategic direction.
A potential combination with Endeavour Mining is seen as a strategic fit. Endeavour, backed by billionaire Naguib Sawiris, has been actively seeking new mining assets to expand its business. Its strong presence in Africa makes it an attractive partner for Barrick's African assets, described by one banking expert as Barrick's 'rump'. Endeavour has stabilised its operations after a period of challenges and is now in a position to consider a significant deal.
A tie-up between Endeavour, which has a market value of about $15 billion, and Barrick’s African assets could resemble a merger of equals. This might mean little or no premium for either party in the transaction. While such a combination could expose Endeavour to new regions like Tanzania and the Democratic Republic of Congo, it also carries the risk of reintroducing exposure to Mali, a country Endeavour previously exited and may be hesitant to re-enter. The outcome of these discussions will significantly impact the global gold mining landscape and investor perceptions of African mining assets.