Newmont Corporation has announced that, following the completion of due diligence, it has entered into a binding Scheme Implementation Deed (SID) under which Newmont will acquire 100 percent of the issued share capital in Newcrest by way of an Australian court-approved Scheme of Arrangement.

The deal is worth about A$28.8 billion ($19.2 billion).

It will create the world’s biggest gold producer.

"The combination of Newmont and Newcrest represents an exceptional value proposition for shareholders and other stakeholders. It creates an industry-leading portfolio with a multi-decade gold and copper production profile in the world’s most favorable mining jurisdictions", said Tom Palmer, President and CEO of Newmont.

Palmer noted in a statement: "Following a robust due diligence process, we have identified a number of opportunities to unlock substantial value and will apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-life, low-cost gold and copper assets".

He said: "Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500 million in annual synergies and an estimated $2 billion in incremental cash flow from portfolio optimisation opportunities, both part of our strategy to maximise value for shareholders and other stakeholders".

Palmer continued: "This transaction also increases Newmont’s annual copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio. We intend to quickly realise these opportunities to create superior value for our shareholders, workforce, host communities, and governments".

Newcrest’s Chairman, Peter Tomsett, added: "This transaction combines two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline".

Tomsett said: "In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market-leading position in safety and sustainability".

The Newcrest Board, he indicated, "is unanimously recommending the proposal".

"We are very proud of the entire Newcrest team for building a world-class metals business, which will form a key part of the combined group".

"We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future".