Goldcorp to buy Glamis Gold in deal worth $21.3 billion

Thursday Aug 31, 2006 12:59am ET
By Mark McSherry

NEW YORK (Reuters) - Vancouver-based Goldcorp Inc. will acquire Glamis Gold Ltd. in a stock transaction worth $21.3 billion to create one of the world's largest gold mining companies, the firms said on Thursday.
The new company will continue under the name Goldcorp Inc. Glamis' shareholders will exchange each Glamis share for 1.69 shares of Goldcorp, representing a value of $51.49 per share based upon the closing price of Goldcorp on August 30, 2006.

The companies said this represents a premium of 32.7 percent to the closing price of Glamis' shares on August 30, and 34.8 percent to the 20-day volume weighted average.

The firms said the new Goldcorp will have proven and probable reserves of 41.1 million gold ounces.
"The combination of Goldcorp and Glamis will create a world class low-cost gold producer in the Americas with industry-leading growth from an exciting portfolio of development projects," Ian Telfer, President and Chief Executive Officer of Goldcorp, said in a statement.

After the transaction, expected to close in November, current Goldcorp shareholders will own 60 percent of the new Goldcorp and current Glamis shareholders will own 40 percent.

The deal has been approved by the boards of Goldcorp and Glamis but is subject to approval by 66.6 percent of Glamis shares voted at a special meeting called to approve the transaction.

Glamis has agreed to pay a break fee to Goldcorp under certain circumstances of $215 million. Glamis has also provided Goldcorp a right to match any competing offers. Continued...