HomeBusinessAshanti, AngloGold merger on the cards

Ashanti, AngloGold merger on the cards

Ngoni Chanakira

ASHANTI Goldfields Company Ltd (Ashanti) plans to merge with the cash-rich AngloGold Ltd in a move analysts say will boost earnings and resources for both mining concerns.


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The Ghanaian-incorporated Ashanti Goldfields is listed on the Ghanaian, London, as well as the Zimbabwe Stock Exchanges, while AngloGold is listed on the LSE and in Johannesburg.


In Zimbabwe Ashanti employs several hundred workers and last year produced more than 100 000 ounces of gold at its Freda Rebecca Mine subsidiary.


The company’s Zimbabwe share price currently stands at $650, making it the most expensive among mining firms listed on the local bourse.


Last week the Ashanti share price shot through the roof when speculators learnt that the two companies were engaged in negotiations which could result in a merger.


Ashanti chief financial officer Srinivasan Venkatakrishnan immediately released a cautionary statement to international investors confirming that the deal was “definitely on” and warning them to be careful in their dealings in the company’s shares.


Venkatakrishnan said: “The board of Ashanti Goldfields Company Ltd notes the recent movements in its share price. It confirms that the boards of Ashanti and AngloGold Ltd are in discussions regarding a proposed merger of the two companies at a ratio of two AngloGold shares for every 100 Ashanti ordinary shares or global depository securities. These discussions may or may not lead to a proposal being made for the entire issued share capital of Ashanti.”


The financial officer said the boards of the two companies had initiated discussions with “certain stakeholders” and a further announcement would be made “in due course”.


He said, however, there could be “no assurance that agreement will be reached”.


“Consequently, shareholders of Ashanti are advised to exercise caution when dealing in the relevant securities until a further announcement is made,” he said.

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