By Judy McKinnon
Newmont Mining Corp. (NEM) confirmed Monday that it ended merger
talks with fellow gold giant Barrick Gold Corp. (ABX), detailing
its decision in a letter sent to the Toronto miner's board on
Friday.
In the letter, signed by Newmont Chairman Vincent Calarco, the
Denver-based miner said it and Barrick had been working hard to
reach a merger deal, but it became evident over the past several
weeks that "the type of constructive, mutually respectful and
partnership-oriented relationship necessary to realize the
potential benefits of that combination does not yet exist."
Newmont told the Barrick board that its own board met a number
of times "since we were twice told definitively last Thursday by
your co-chairman that the process in which we had been engaged to
find a basis to merge our two companies was "dead". As you would
expect, that unilateral declaration made us question whether we
actually shared the vision and values that are necessary to forge a
successful new company."
The Newmont letter was addressed to Barrick's directors and to
the attention of Barrick Co-Chairman John Thornton.
"While our team has found your management team's engagement to
be constructive and professional, the same constructive nature
cannot be said of our discussions with your Co-Chairman on certain
fundamental strategic and structural issues over the past two
weeks," Newmont wrote in the letter.
"Our efforts to find consensus have been rejected out of hand
repeatedly," it said.
Newmont also took issue with how it's been characterized in some
reports about the possible merger, saying it's been called
"extremely bureaucratic and not shareholder-friendly." It denied
the characterization, which the National Post newspaper last week
attributed to Barrick Chairman Peter Munk.
"It is, in fact, because of our deep commitment to our
shareholders that we reluctantly have had to unanimously conclude
that we need to put aside our attempts to resuscitate this
initiative and should pursue our course as an independent company,"
it said in the letter.
Earlier Monday, Barrick said Newmont had ended merger talks.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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