Goldcorp to acquire Glamis in friendly deal

Section:

By Wendy Stueck
The Globe and Mail, Toronto
Thursday, August 31, 2006

http://www.theglobeandmail.com/servlet/story/RTGAM.20060830.wgold0830/BN...

VANCOUVER -- Bucking the trend of corporate Canada becoming a shopping mall for foreign investors, Vancouver-based Goldcorp Inc. will announce Thursday a friendly takeover of Glamis Gold Ltd. that will create the world's No. 3 gold producer.

The new company will have a combined market capitalization of more than $20 billion.

The deal, expected to be announced before markets open today, will put the combined company -- to be called Goldcorp -- in a prime position to appeal to investors keen on companies that provide exposure to a rising gold price, now trading at around $620 U.S. an ounce.

If the transaction goes ahead, it will mark the latest in a string of successful acquisitions for Goldcorp chief executive officer Ian Telfer.

The deal would also create a Canadian-based “super major” in the gold sector, an outcome that at this point seems unlikely on the base metals scene, where two of Canada's biggest mining names are headed for the history books.

It wasn't supposed to be that way: Nickel miner Inco Ltd. and copper-nickel giant Falconbridge Ltd. last fall announced a friendly, multi-billion-dollar combination that would have created the world's biggest nickel company.

But the transaction ran into regulatory delays and other problems, including a competing bid for Falconbridge from Anglo-Swiss miner Xstrata PLC, which had snapped up a 20-per-cent stake in the Canadian company in August, 2005.

Xstrata this month acquired control of Falconbridge. Inco, meanwhile, has agreed to be acquired by U.S. copper giant Phelps Dodge Corp. but is also the target of a bid from Brazilian iron-ore giant Companhia Vale do Rio Doce, which is widely expected to land Inco.

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