Sawiris-backed Endeavour to buy Teranga Gold in $1.86-billion deal

Endeavour Mining Corporation has agreed to buy Teranga Gold in a deal that will reshape the African gold sector. The combined company will produce about 1.5 million ounces of gold per year across West Africa, making it one of the 10 largest gold producers globally.

Endeavour stated that it was discussing a “merger-of-equals-style” deal with Teranga after Bloomberg first reported the talks, according to Fintech Zoom. Endeavour is offering a 5.1-percent premium to Teranga’s closing price Friday, valuing its equity at C$2.44 billion ($1.86 billion), based on Bloomberg’s.

Commenting on the acquisition, Endeavour CEO Sebastien de Montessus said: “The combined entity will become a new senior gold producer and enjoy an improved capital markets profile, underpinned by a healthy balance sheet and strong cash flow capabilities to support a sustainable dividend.”

In November 2020, Endeavor bought Teranga Gold for 2 billion Canadian dollars ($1.9 billion) in an all-share deal, making it one of the world’s top-10 gold producers, FT reported. The acquisition positioned Endeavour as West Africa’s leading gold producer, with an annual production capacity of about 1.5 million ounces.

Sawiris stake in Endeavor

The Sawiris family holds a significant stake in Endeavour through its privately-owned gold mining company, La Mancha Holdings. Through La Mancha, Sawiris will invest a further $200 million in the latest deal, giving it a 19-percent stake in Endeavour.

On March 30, La Mancha announced the closing of a 200-million Canadian dollar ($159 million) subscription to Endeavor shares.

With the completed subscription, La Mancha received 8,910,592 common shares in Endeavour at a unit price of around 29.361 Canadian dollars ($23.34) per share, according to a corporate press release.