AngloGold-Ashanti merger to complete soon

World number two gold miner AngloGold (ANG) could complete its proposed merger with Ghana's Ashanti Goldfields within three to six months, assuming no further offers for Ashanti, Merrill Lynch said in a recent note.

However, once the deal is done there still needs to be:

--Ghanaian government regulatory approval and in addition the government also has a 16.9% stake in Ashanti and has yet to approve AngloGold's offer;

--US Securities Exchange Commission approval, which could take up to six weeks;

--the Ghanaian courts need to provide their approval for the deal; and

--Ashanti shareholders need to vote on the merger.

The deal is likely to be value accretive at the net asset value (NAV) level for AngloGold, with the group's NAV set to climb by 60% to US$10.60 per share, the investment bank said.

Merrill Lynch's recommendation on AngloGold is currently neutral.

The Ashanti deal will dilute Anglo American's (Anglo, AGL) stake in AngloGold from about 51% to 44% and the group will have to purchase close to 6% of the 'new AngloGold' or 15.5 million shares in order to maintain a controlling holding in the new group.

"A potential first step is for Anglo to buy Lonmin's (LON) post merger interest in the new entity of 3.9%," Merrill Lynch said.

AngloGold was quoted R3.99 or 1.4% lower at R274.00 on the JSE Securities Exchange South Africa.