Eldorado Gold Corp.’s acquisition of European Goldfields Ltd.

Eldorado Gold Corp., Canadian Gold and Iron Producer, said on Sunday that it has agreed to purchase European Goldfields Ltd., a Yukon based small rival company and gold miner with projects in Greece, Romania and Turkey, in a cash and shares deal of C$2.5 billion (US$2.4 billion), in order to expand its business opportunities in the production of gold and other precious metals. It is the Canadian company’s biggest acquisition. However, the deal comes at such time when the gold prices are trading close to record high values.

Directors of European Goldfields unanimously recommend the vote of the shareholders in favor of the deal.

From Reuters Canada,

The deal represents a 48.4 percent premium based on both companies’ closing share prices on Toronto’s main stock index as of December 5, the last trading day before European Goldfields said it had received preliminary approaches from third parties.

European Goldfields shareholders will be offered 0.85 Eldorado share and C$0.0001 in cash for each European Goldfields share they own. The exchange ratio represents a value of C$13.08 per share based on the closing stock price of Eldorado on the TSX on December 16 of C$15.39.

Paul Wright, President and Chief Executive Officer of Eldorado, said in a statement.

We are extremely pleased to have reached this mutually beneficial transaction with European Goldfields. Integration of European Goldfields’ business with our own 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.  We are particularly pleased to be partnering with Aktor, Greece’s largest construction company, to help ensure effective, safe and timely development of our operations in Greece.

Paul Wright
Paul Wright

Mr. Wright added,

The combination of our two companies represents a strategic and compelling value proposition, both to the shareholders of European Goldfields and Eldorado and to other stakeholders in Greece.  Eldorado’s proven track record of mine operations and focus on delivering value to investors will ensure a profitable future for the combined company.  Eldorado’s considerable investment in Greece, demonstrated focus on safe, responsible mining and our partnership with Aktor will enable us to develop a constructive and enduring relationship with government and the local communities in which we will operate in Greece.


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