A pair of Canadian gold companies— Iamgold Corp. and Cambior Inc.— said Thursday they are joining forces in a $3 billion US merger.
The companies said the deal will create the 10th largest publicly traded gold producer in the world.
Cambior shareholders are being offered 0.42 of an Iamgold share for each Cambior share they own.
The stock-swap deal will see current shareholders of Toronto-based Iamgold wind up with 57 per cent of the new company, which will carry the Iamgold name. Shareholders of Montreal-based Cambior will own the rest of the merged firm.
A vote on the deal by Cambior shareholders is expected by early November.
The two companies said they would have 1.1 million ounces of gold production annually, plus reserves of 9.7 million ounces.
"The combination of Cambior's operating and development expertise and Iamgold's financial strength should create enhanced returns for shareholders and provide greater opportunities for employees of both companies," said Louis Gignac, the president and CEO of Cambior, in a release.
Cambior has agreed to pay $45 million to Iamgold under certain circumstances if the their deal is not completed. Cambior has also given its new partner the right to match competing offers.