Gold Fields to acquire Gold Road for $3.7b

South African gold giant Gold Fields is set to acquire one of Australia’s largest gold miners, Gold Road (ASX: GOR), in a takeover scheme valuing the company at $3.7b.

Gold Road has convinced its Gruyere gold mine joint venture partner to increase its takeover bid, proposed in March for $3.3b, by nearly $400m.

Gold Road has entered a scheme implementation deed that will allow Gold Fields to acquire 100% of shares in Gold Road by way of a scheme arrangement.

Under the terms of the scheme Gold Road shareholders will receive a fixed cash consideration of $2.52 per share plus a variable cash consideration equal to the full value of each shareholder’s proportionate holding in Northern Star Resources (ASX: NST) .

As of Friday, the total cash consideration equates to $3.40 per share and represents a 43% premium to Gold Road’s undisturbed closing share price on 21 March 2025.

Gold Road managing director and chief executive Duncan Gibbs commented that the scheme provides shareholders with a compelling premium.

“This offer price represents a material premium to the undisturbed share prices prior to the initial Gold Fields’ proposal and a material premium to long term trading levels,” he said.

“The Gold Road team will work closely with all stakeholders, including our employees, suppliers and the traditional owners of the lands on which we operate to ensure their interests are prioritized should the scheme proceed.”

The takeover bid aims to consolidate the Gruyere gold mine in WA, which has a mineral resource of 96.3Mt grading 1.23g/t gold for 3.8Moz of contained gold, in which both companies are equal joint venture partners.

Gold Road chairman Tim Netscher said that the board has been focused on confirming a deal that acts in the best interest of its shareholders is reached.

“The Gold Road directors consider that the value offered by the all-cash scheme consideration delivers compelling value for Gold Road shareholders compared to what may otherwise be available if Gold Road continued to operate as a standalone entity,” he said.

“The cash proposal accelerates realization of Gruyere’s value and provides certainty for Gold Road shareholders today at an attractive premium to trading level prior to receipt of the initial Gold Fields proposal.”