Eldorado Gold is to buy European Goldfields in a cash-cum-shares deal worth Canadian $2.4 billion. Eldorado will acquire all of the issued and outstanding common shares of European Goldfields with an arrangement under the Yukon Business Corporations Act.
As per the arrangement the shareholders of European Goldfields will receive 0.85 Eldorado shares and C$0.0001 in cash for each of European Goldfields shares. This is at a 56.5% premium to the 20 day volume weighted average price for the shares. The deal still needs shareholder approval of both companies involved.
The Vancouver based Canadian company is an iron and gold producer. European Goldfields currently has an operational mine in Greece, which will help Eldorado raise its gold production. The European Goldfields company also has projects in China, Turkey, Brazil, and Romania besides Greece.
The Toronto Stock Exchange price for Eldorado was higher as they announced that the deal would produce a company with a market capitalization of $10.59 billion. Should the deal go through it will greatly improve the project pipeline for Eldorado.
Paul Wright, President and Chief Executive Officer of Eldorado said that they were extremely pleased to have reached this mutually beneficial transaction with European Goldfields. He added that the integration of European Goldfields' business with theirs will provide Eldorado with the dominant gold mining business in the Aegean Region and the combined business will constitute the leading low cost, high growth intermediate gold producer globally.