BRUSSELS - In a deal creating the world's biggest gold miner, the European Union Commission Friday approved the merger of South Africa's AngloGold Ltd. with Ghana's Ashanti Goldfields Co. Ltd.
Ashanti shareholders will get 29 new AngloGold ordinary shares for every 100 Ashanti ordinary shares.
AngloGold is looking to increase its market share of the global gold mining industry's production and expects the merger to derive significant synergies.
"The integration of Ashanti should be quite rapid," said AngloGold Chief Executive Bobby Godsell.
The deal had to be cleared by the E.U. Commission because both companies carry out significant levels of business within the union.
The new merged AngloGold Ashanti will replace current number one gold miner, Newmont Mining Corporation (NYSE:NEM - News) of the U.S., and will produce 7.6 million ounces of gold annually.
Ghana's government, which owns a 16.9% stake in Ashanti gave its go-ahead as it believes the merger is less risky and provides better prospects than a rival bid by Randgold Resources Ltd. (NasdaqNM:GOLD - News) .
"The offer will better benefit Ashanti and Ghana both in the short and long term," said Ghana's Minister of Mines Cecilia Bannerman.
U.K.-based Lonmin PLC. , which is the largest shareholder in Ashanti with a 27.6% stake has also given its approval.
Analysts also back the deal. John Meyer of Numis Securities said the deal would "bring far more resources, expertise and logistical support to the company, particularly for the development of Obuasi mines."
Johannesburg-based AngloGold is 51% owned by South African mining giant Anglo American Platinum Corporation Ltd. .
Accra-based Ashanti is a gold mining and exploration group with projects in eight African countries.
The deal was approved under the Commission's simplified antitrust procedure. This clears mergers or acquisitions after one month if no objections are raised by third parties.