Cabinet endorses AngloGold Ashanti merger

....merger package presented to Parliament
Accra, Oct. 29, GNA - The Cabinet on Tuesday endorsed the merger of South African mining giant, AngloGold and Ashanti Goldfields. The Board of Ashanti had earlier recommended AngloGold's 1.4 billion dollar offer.

"The government has decided to support the decision of the AGC Board recommending acceptance of the merger with AngloGold Limited," an official statement signed by Nana Akomea, Minister of Information said. The statement followed an all-day special session of the Cabinet to deliberate on the merger proposals presented by the Ashanti Board last Friday.

The proposals included a revised rival bid from RandGold Resources Ltd.

The deal is subject to shareholder and regulatory approval among others.

However, the Cabinet endorsement of AngloGold is a significant step in the process. The government, carriers a "golden share" that represents sole veto power in the corporate decisions of Ashanti. Last Friday, the Ashanti Board reaffirmed its earlier recommendation to the government to give the nod to AngloGold after Randgold, which was competing with AngloGold raised its bid from one billion to 1.7 billion dollars.

The statement said the government's decision was based on "AngloGold's superior operational experience in deep-level mining, capital endowment and its record of highest dividend payout of all major gold mining companies in the last five years".

"Government also noted that the new company - AngloGold Ashanti - will be the leading gold producing company in the world whose listing on the Ghana Stock Exchange will trade at levels comparable to Johannesburg, London and New York".

It said the government was confident that the AngloGold bid for Ashanti offers superior benefit for Ashanti, Ghana and its people. AngloGold has given a deadline of October 31 for Ashanti to make a decision or risk paying 15 million dollars as a break fee.