Investing.com-- Australian gold miner Ramelius Resources Ltd (ASX:RMS) has agreed to acquire Spartan Resources Ltd (ASX: SPR) to form a gold producer with a market capitalization of A$4.2 billion ($2.7 billion), the companies said in separate statements on Monday.
Under the proposed transaction, Ramelius will acquire all outstanding Spartan shares for A$2.4 billion ($1.5 billion), through either a scheme of arrangement or a conditional off-market takeover offer.
Shareholders of Spartan will receive A$0.25 in cash and 0.6957 new Ramelius shares for each Spartan share, representing an 11.3% premium to Spartan’s last closing price of A$1.60 on March 14.
The merger is expected to create a mid-tier Australian gold producer with a pro-forma market capitalization of A$4.2 billion and a combined mineral resource base of 12.1 million ounces of gold.
Ramelius shares were down 1% at A$2.18 as of 23:47 GMT, while Spartan shares jumped 10.3% to A$1.768.
The companies envision production exceeding 500,000 ounces annually by fiscal 2030.
Spartan’s board has unanimously recommended shareholders vote in favor of the deal, absent a superior proposal, the company said.
This combination will "supercharge" Ramelius’ Mt Magnet production hub, said Ramelius Managing Director Mark Zeptner.
The transaction remains subject to regulatory and shareholder approvals.