August 31, 2006

Goldcorp to Buy Glamis in $21.3 Bln Deal

By Mark McSherry

NEW YORK (Reuters) - Vancouver-based Goldcorp Inc. will acquire Glamis Gold Ltd. in a stock transaction worth $21.3 billion to create one of the world's largest gold mining companies, the firms said on Thursday.

Glamis's shareholders will receive 1.69 shares of Goldcorp for each share of Glamis, representing a value of $51.49 per share based on the closing price of Goldcorp on August 30.

The companies said this represents a premium of 32.7 percent to Glamis's closing share price on August 30.

Goldcorp, North America's number three gold producer before Thursday's deal, and Glamis, a Reno, Nevada-based mid-tier gold miner, said the new Goldcorp will have proven and probable reserves of 41.1 million ounces of gold.

"The combination of Goldcorp and Glamis will create a world class, low-cost gold producer in the Americas with industry-leading growth from an exciting portfolio of development projects," Ian Telfer, president and chief executive officer of Goldcorp, said in a statement.

Goldcorp has operations throughout the Americas and Australia. Glamis has gold mines and development projects in Nevada, Mexico and Central America.


The new company will continue under the name Goldcorp.

After the transaction, expected to close in November, current Goldcorp shareholders will own 60 percent of the new Goldcorp and current Glamis shareholders will own 40 percent.

The deal has been approved by the boards of Goldcorp and Glamis but is subject to approval by 66.6 percent of Glamis shares voted at a special meeting called to approve the deal.

Glamis has agreed to pay a break fee to Goldcorp under certain circumstances of $215 million. Glamis has also given Goldcorp a right to match any competing offers.

Goldcorp CEO Ian Telfer will become chairman of the new Goldcorp. Kevin McArthur, president and chief executive officer of Glamis, will become president and CEO of the new Goldcorp.

The board of the new Goldcorp will have 10 members; six from the board of Goldcorp and four from the board of Glamis.

Goldcorp's financial advisers are Merrill Lynch Canada Inc. and CIBC World Markets Inc. Glamis's financial advisers are Orion Securities Inc. and J.P. Morgan Securities Inc.