West Africa-focused Endeavour Mining has agreed to buy Teranga Gold in an all-share deal to create a top 10 gold producer which will list in London, the companies said on Monday, a week after they announced they were in talks. The agreement is a breakthrough for the fragmented gold sector and for Endeavour, whose previous attempt at a major merger failed. But with investors jittery about pricey takeover deals after a surge in gold prices, Endeavour’s shares fell 2.4 percent to $23, while Teranga Gold – which climbed after the talks were announced last week – fell 1.1 percent. Endeavour will pay 0.470 of its own shares for each Teranga share, a 5.1 percent premium based on Friday’s closing prices – valuing Teranga, whose shares are up 97 percent this year, at $1.99bn. Endeavour shareholders will get 66 percent of the combined entity, leaving Teranga shareholders with the remaining 34 percent. Teranga will get three seats on the board to Endeavour’s seven. The enlarged Endeavour would seek to list in London in 2021. As the largest premium pure gold producer in that market, it would eventually aim for entry into the FTSE 100 index, thereby increasing the pool of investors and luring more generalists. For the London market, a listing would plug a gap left by Randgold’s departure following its merger with Barrick completed at the start of 2019.

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