South African gold mining powerhouse Gold Fields is set to acquire Australia’s Gold Road Resources in a massive R45 billion (AUD$3.7 billion) deal through its subsidiary Gruyere Holdings.
The companies have signed a binding Scheme Implementation Deed, under which Gold Fields will purchase 100% of Gold Road’s issued and outstanding share capital.
The Board of Gold Road has unanimously recommended that its shareholders vote in favor of the acquisition, provided no better offers emerge and subject to an independent expert’s report confirming the deal’s fairness.
Gold Road owns a 50% interest in the Gruyere gold mine in Western Australia and controls several wholly owned exploration projects across the Yamarna Greenstone Belt.
Gold Fields already holds the remaining 50% stake in Gruyere and sees the deal as part of its strategy to strengthen its portfolio with high-quality, long-life gold assets.
“We are grateful for our partnership with Gold Road, which has seen the asset evolve from exploration discovery to a high-quality operational mine,” said Mike Fraser, CEO of Gold Fields.
“We look forward to maximising the potential of the Gruyere gold mine and Gold Road’s exploration package to the benefit of Gold Fields shareholders.”
The timing of the acquisition comes after a stellar financial year for Gold Fields, which reported a 248.68% increase in net income to USD428 million (R7.8 billion) in 2024, supported by record-breaking gold prices.
Under the agreement, Gold Road shareholders will receive A$3.40 (R62) per share, made up of two parts: a fixed cash payment of A$2.52 per share and a variable cash portion linked to Gold Road’s shareholding in Northern Star Resources, calculated based on the 5-day volume-weighted average price before the scheme takes effect.
As of May 2, 2025, the variable cash component was valued at A$0.88 per share, though this will fluctuate depending on Northern Star’s market performance.
If the deal proceeds, Gold Road plans to declare a fully franked special dividend of roughly A$0.35 per share, amounting to about A$379 million in total payouts to shareholders.
This dividend will be funded entirely from Gold Road’s existing cash reserves and deducted from the fixed cash consideration.
The final dividend amount will depend on Gold Road’s financial performance leading up to the effective date of the scheme and remains at the discretion of its board.
The acquisition values Gold Road’s equity at approximately A$3.7 billion, with an enterprise value around A$2.6 billion.
The offer reflects a 43% premium over Gold Road’s undisturbed closing share price of A$2.38 on March 21, 2025, a 35% premium over its 30-day average price of A$2.52, and a 39% premium over its 3-month average price of A$2.45, all measured as of the same date.
Gold Fields has emphasized that the scheme’s price is “best and final” and will not be increased unless a superior competing proposal is presented.
