Eldorado Gold Corporation (NYSE:EGO) has agreed to acquire European Goldfields Limited (EGU) in a transaction valued at $2.5 billion Canadian.
European Goldfields shareholders will receive 0.85 Eldorado shares and $0.0001 Canadian per share in cash, per share of European Goldfields owned, equivalent to $13.08 Canadian per share.
Eldorado noted the purchase price is a 56% premium to European Goldfields' 20-day average prior to December 5, when the company said it had received offers.
European Goldfields has gold reserves of 9.2 million ounces and multi-stage assets in Greece, Romania and Turkey.
Eldorado said the acquisition will create a premier high-growth, low-cost intermediate gold producer, with expected annualized production growth of 30% over the next four years.
Two-thirds of European Goldfields shareholders will need to approve the deal, at meetings to be held in February, and the boards of both companies have already approved the transaction.
Eldorado Gold shares were flat in Monday's premarket trading.
Precious metals investors will want to keep an eye on the Gold Miner's ETF (AMEX:GDX), to see if the group of stocks, including Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM), move on news of M&A in the sector.
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