Canada’s Eldorado Gold (TSE:ELD) has signed a deal to acquire Foran Mining (TSE:FOM) for C$3.8 billion.
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Eldorado Gold, which is based in Vancouver, British Columbia, said the acquisition will create a stronger gold and copper miner at a time when prices for metals are near all-time highs. The combined company will have a portfolio of long-life assets, exploration upside, and exposure to more critical minerals.
Under terms of the the agreement, Foran shareholders will receive 0.1128 of an Eldorado share plus a penny in cash for each Foran share already held. Foran Mining is also based in Vancouver. The deal is expected to create one of Canada’s largest gold miners.
Terms of the Acquisition
Eldorado shareholders will hold about 76% of the combined company, while Foran shareholders will own 24% of the new company. The deal still requires a vote by Foran shareholders and is subject to regulatory approvals. It’s not immediately clear when the acquisition is expected to close.
Eldorado Gold owns and operates gold mines in Turkey, Greece, and throughout Canada. The company was formed through a merger with European Goldfields in 2011. ELD stock is down 12% on news that it plans to acquire Foran Mining.
Is ELD Stock a Buy?
Eldorado’s stock has a consensus Moderate Buy rating among six Wall Street analysts. That rating is based on five Buy and one Sell recommendations issued in the last three months. The average ELD price target of $64.57 implies 23.64% upside from current levels.
