Audio By Carbonatix
Barrick Mining, one of the world's leading gold miners, is weighing a possible London listing for its African business, with a potential all-share transaction with UK-listed Endeavour Mining seen as one option under consideration, two sources familiar with the matter told Reuters.
Discussions are at an early stage, and no decision has been made, the sources said, adding there is no certainty a deal will materialise and no announcement is expected in the near term. The combined entity could be worth $30 billion in market capitalisation.
Barrick and Endeavour Mining did not comment.
Under one scenario being explored, the Canadian-listed miner would retain its Toronto listing as a holding company that would own shares in the North American-listed Barrick in New York and a separate Africa-focused entity listed in London, one of the sources said.
The move, if it goes through, would be a repeat of what the company did two decades ago, when it spun off its Africa business and listed it in the UK as Acacia before later reacquiring it, said another source who is aware of Barrick's operations.
Earlier this year , Barrick Mining said it planned to spin off its North American business, with a primary listing in New York.
CEO Mark Hill also said the company will look to sell its mines in African countries and in places where Barrick does not have majority ownership but does have management control, such as Papua New Guinea.
Barrick, under Chairman John Thornton and Hill, is looking to move the company away from what it considers risky regions, as investors seek stronger returns.
The push comes in the wake of the company settling a year-long dispute with Mali's military-led government, which led to the ouster of its former CEO Mark Bristow.
London-listed Endeavour, backed by billionaire Naguib Sawiris, has been looking for mining assets to grow the business. Endeavour's presence in Africa makes it a strategic fit for Barrick's move to shed its "rump", one banker in the mining M&A space said.
Another said, while a combination with Barrick's African assets could give Endeavour exposure to new regions such as Tanzania and the Democratic Republic of Congo, it could also reintroduce exposure to Mali, where Endeavour has previously exited and may be reluctant to return.
Endeavour, after a period of operational and governance challenges, has stabilised and is now at a stage where it could consider a larger deal, the source said.
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, potentially with little or no premium, the source added.
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