GoldCorp Inc. to Acquire Glamis Gold Ltd. for 42.35 Times Revenue

Weekly Corporate Growth Report, Sep 4, 2006

The Deal: GoldCorp Inc. has agreed to acquire Glamis Gold Ltd. for about $8.6 billion in stock. Under the terms of the deal, each share of Glamis Gold will be exchanged for 1.69 shares of GoldCorp. The deal values Glamis at $51.49 per share, a premium of 33 percent over the company's share price prior to the deal announcement. After the transaction closes, current GoldCorp shareholders will own 60 percent of the combined company. The companies expect the transaction to close in November 2006.

Discussion: Glamis Gold is a gold mining company. Glamis makes the majority of its revenue from two operating properties - the Marigold Mine in Nevada, in which the company owns a 67 percent stake and operates in a joint venture with Barrick Gold, and the San Martin Mine in Honduras, Mexico. Glamis also owns the El Sauzal Mine in Mexico, which produces both silver and gold.

Canadian gold miner GoldCorp Inc. operates mines in Canada, the United States, Argentina, Mexico, and Australia. The company is one of the top five gold mining concerns in the world. GoldCorp also produces copper. The company acquired Wheaton River Minerals in 2005.

The acquisition of Glamis will increase GoldCorp.'s output by more than a third. The acquisition is part of a larger consolidation in the precious metals sector, driven by high metal prices. Gold reached a 26-year high price in May of 2006.