Mergers and acquisitions: Hostile takeover in gold sector likely

A hostile takeover bid may be soon underway in the mining sector. The latest mergers and acquisitions news in Canada suggests that in what would be the nation's largest scale mining deal ever, Barrick Gold may make a hostile takeover bid for Newmont Mining stocks to the tune of $19 billion. Barrick would funnel some of Newmont's assets to an overseas project.

Barrick has already shelled out more than $6 billion to recently purchase competitor Rangold Resources. The company has said it will continue to seek out additional mergers and acquisitions. Meanwhile, Newmont has been poised to buy out rival Goldcorp for $10 billion. If Barrick is successful in its takeover of Newmont, the Goldcorp deal would go flat, which would put Barrick on the line for a $650 million fee for breaking the deal. 

Apparently, Barrick's plans to take over Newmont are based on the expectation that the merger might increase production. Neither Barrick, Goldcorp nor Newmont have made formal statements to the media regarding the potential takeover. But experts view Barrick and Newmont as a good match with a lot of overlap in their North American operations.

Mergers and acquisitions are complex business deals. These types of transactions in Canada need the advice of an experienced Ontario lawyer. Corporate takeovers, mergers or acquisitions can be either financially lucrative or could spell disaster to a company. So, it's important to get the legalities straight before making any final, major business decisions. Not doing so could be potentially disastrous for clients involved in these decision-making processes.

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