Endeavour Mining has agreed to buy Teranga Gold via an all-stock merger deal that is set to create a world top-ten gold producer with average production of over 1.5 million ounces per year.
Per the deal, which is expected to be finalized in the first quarter of 2021, Endeavour will offer 0.47 of its own shares for each Teranga share, leaving Teranga valued at $2.44 billion Canadian dollars ($1.86 billion), according to a Bloomberg estimation.
The combined entity will be 66-percent owned by Endeavour shareholders and 34-percent owned by Teranga shareholders.
With the Egyptian billionaire Naguib Sawiris pledging to invest $200 million in the new entity via his company La Mancha, the latter's share in Endeavor will be trimmed from 24 percent to 19 percent.
The new entity is planned to be listed on the London Stock Exchange.
"By combining our complementary assets, we will enhance our strategic position on West Africa’s highly prospective Birimian Greenstone Belt and we will have the ability to deliver material synergies," said Endeavour CEO and President Sébastien de Montessus.
"The combined entity will become a new senior gold producer and enjoy an improved capital markets profile, underpinned by a healthy balance sheet and strong cash flow capabilities to support a sustainable dividend," he added.