In what puts an end to years of legal and environmental tussle with the government, multinational mining company Barrick Gold Corporation has completed the takeover of the embattled Acacia Mining in Tanzania.
Ventures Africa reported in July that the Canadian-based Barrick had reached an agreement to buy out fellow shareholders in Acacia Mining. The deal, which values the firm at $1.2 billion, was finalized after a Dar court approved the acquisition on September 13.
Following the approval, Barrick’s board was rearranged and Acacia’s shares suspended from the London Stock Exchange (LSE). Barrick also acquired all outstanding shares of Acacia which gives it full control of the latter’s Tanzanian market and operations.
Barrick said the scheme became effective on September 17 and the company now owns 100 percent of Acacia. “We will manage the sites directly under the Barrick banner through our African and Middle East region,” the company told The East African.
Prior to the acquisition, Barrick owned a 64 percent stake in Acacia, which it spun off in 2010. Barrick had handed over operations and management of its Buzwagi, Bulyanhulu and North Mara mines to Acacia. But the parent firm said earlier this year it wanted to take back full control in a bid to resolve a longstanding dispute between Acacia and Tanzania over valuable mining assets.
What followed was a two-month deadlock between the largest gold mining company in the world and its Africa unit. Acacia had said that it is worth more than what Barrick’s earlier offer valued the company at. Barrick first made an offer to buy out other Acacia shareholders in May, worth 193 pence per share.
After a prolonged stalemate, Barrick raised the offer that would give it complete ownership of Acacia, bowing to minority shareholders. The final offer was 232 pence per share as well as the minority shareholders getting special dividends on Acacia exploration properties and deferred cash consideration dividends.
With the deal now finalized, Acacia becomes a minor shareholder in Barrick Gold. Thus, the miner’s shareholders will now become Barrick Gold shareholders, Chief Executive Mark Bristow said in a memo to Acacia’s shareholders, management and employees.
Bristow also announced that two of Acacia’s directors will be joining the Barrick board, while every other director has resigned. Barrick will now close the London office to reduce corporate overheads, The East African reports.
The buyout deal is expected to pacify the Tanzanian government which in May announced its intention to “cut all ties’’ with Acacia Mining after a prolonged dispute over gold and copper concentrate exports among other issues. The government has said it is willing to work with only Barrick. The company is expected to appoint a general manager and then reopen the North Mara mine which was closed in a dispute with Acacia.