The Foreign Investment Review Board (FIRB) has given the green light to the takeover of Sino Gold by Canada’s Eldorado Gold.
In a statement released yesterday, Sino Gold announced FIRB’s unconditional approval of the friendly takeover, saying it satisfied the scheme implementation deed between the two companies.
Originally announced in August, the $1.76 billion deal will create a company with a market value of around US$6 billion, with gold reserves of 12 million ounces and resources of more than 23 million ounces, Sino Gold said.
Eldorado, which was already Sino Gold’s largest shareholder with a 19.83% stake, has offered 0.55 of its shares for each Sino Gold share, which it says values the company at approximately $2.2 billion.
As a Chinese-focussed company, Eldorado said Sino Gold represents a very attractive prospect for the Vancouver-based company.
“The business combination with Sino Gold enables Eldorado to realize its vision of establishing a leading presence in China,” Eldorado president and chief executive Paul Wright said.
Under the terms of the takeover, current Eldorado shareholders will own approximately 75% of the merged company while Sino Gold shareholders will own the remaining 25%.