AngloGold, Ashanti finalise merger

Gold mining giant AngloGold and the Ghanaian government have finalised the terms of the deal whereby AngloGold will merge with Ashanti Goldfields. Consequently AngloGold has withdrawn its cautionary.

AngloGold said on Monday that it has entered into a definitive support agreement with the Ghanaian government in its role as holder of 16.9 percent of Ashanti's share capital and has agreed the definitive terms concerning certain fiscal and regulatory undertakings in its role as regulator of Ashanti.

The two parties have agreed to enter into the Stability Agreement promptly after the approval by the Ghanaian Parliament. The government has agreed to use its reasonable endeavours to obtain this approval prior to the implementation of the merger.

"We are delighted to have taken this next important step towards the consummation of the merger. We remain very excited by the potential of the combination and look forward to the approval of the merger arrangements by the Parliament of Ghana and Ashanti shareholders in the New Year. We are optimistic that the merger will be implemented at or around the end of the first quarter in 2004," Bobby Godsell, CEO of AngloGold said.

The merger is conditional on the support of the Ghana government, both in its capacity as regulator and as shareholder of Ashanti.

In terms of the Government Support Deed, the Ghana government has agreed to vote in favour of the scheme of arrangement by which it is proposed to implement the merger and to vote against any competing acquisition proposal to acquire either a majority interest in Ashanti or all or substantially all of its assets.

It has also agreed not to sell, transfer, assign, pledge or otherwise encumber its interest in Ashanti and not to solicit any competing acquisition proposal.

AngloGold has agreed to nominate, as directors of AngloGold Ashanti, two Ghanaian citizens recommended by the Government and acceptable to the board of directors of AngloGold and to Ashanti, in accordance with relevant applicable company laws (in addition to the proposed appointment of Sam Jonah as a director and President of AngloGold Ashanti as previously announced); and to submit an application for the listing of AngloGold Ashanti Shares and AngloGold Ashanti Ghanaian Depositary Securities on the Ghana Stock Exchange as soon as reasonably practicable.

The Government Support Deed will automatically terminate if the Stability Agreement is not approved by Parliament by July 31 2004, AngloGold said in a statement.

In consideration, AngloGold will issue to the Government 2.658 million AngloGold Ashanti shares and pay $5-million in cash.