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The world's largest gold mining company, U.S.-based Newmont wanted to buy 100 percent of its Australian rival Newcrest for about A$24 billion ($17 billion), the Financial Times reported. According to financial markets platform Dealogic, the deal could be a record M&A deal this year.

Newmont had offered 21 percent more for the Australian company than its shares were worth at the close of trading on Feb. 3. But after news of a possible takeover emerged, Newcrest shares rose 9.3 percent in trading Feb. 6. At the same time, Newmont securities depreciated 4.92 percent on Feb. 3 and continued to fall 6 percent in premarket trading on Feb. 6.

If the deal goes through, Newmont would control 70 percent of the combined company and Newcrest 30 percent. If the takeover goes through, four of the five gold mines in Australia would be owned by one company.

Newcrest said it would consider the offer. The company recalled that it had previously rejected another takeover offer because its valuation was too low. However, Simon Mohinney, chief investment officer of Allan Gray (Newcrest's largest shareholder), has already said he would not support the current deal, as Newmont also too cheaply valued its Australian competitor.

Newcrest was founded by Newmont itself in the 1960s as an Australian division. But Newcrest was spun off as a separate business in 1990 after it acquired the gold assets of miners BHP and Australmin Holdings. A potential deal could reunite the companies more than 30 years later.

That said, there is a risk that Newmont's proposal would lead to a bidding war for Newcrest, whose shares nearly halved in price between April and September of last year, the FT notes. Other major companies, including Canada's Barrick Gold and Agnico Eagle, are also seeking to consolidate the gold market in Australia.

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