Zijin Mining Group Co. Ltd.'s planned $4 billion acquisition of Canadian miner Allied Gold Corp. has collapsed after Chinese regulators failed to approve the transaction by the July 29 deadline. The deal, initially valued at $44 per share, would have been one of the largest gold mining acquisitions of the year. Instead of the full takeover, Zijin has opted to acquire a 9.2% stake in Allied Gold through a private placement of approximately 12.8 million newly issued shares at C$32.55 each, totaling about $295 million. This transaction is expected to close around August 10 and provides Allied with much-needed capital to fund its African operations, including the Kurmuk mine in Ethiopia and expansions in Mali and Côte d’Ivoire.
The failure of the takeover underscores the growing difficulties faced by large cross-border mining transactions involving Chinese buyers. While Canadian and other international regulatory bodies approved the deal, it stalled in China, reportedly due to concerns from the National Development and Reform Commission (NDRC) regarding the premium being paid and geopolitical risks in regions like Mali. Allied Gold's shares fell significantly in response, with an 18% drop to C$24.27 on the Toronto Stock Exchange and a 16% decline to $17.68 in New York, valuing the company at just over C$3 billion ($2.1 billion).
Allied Gold's CEO, Peter Marrone, suggested the regulatory rejection in China was likely a broader policy decision rather than specific to his company. This event comes as China aims to coordinate its overseas mining deals more strategically, with the NDRC leading oversight and state-owned Guangyan International Investment Co. supporting compliance, financing, and industry-wide planning for outbound transactions. This signals a new era for China's outbound mining M&A, where heightened regulatory scrutiny and geopolitical considerations will play an even more significant role in approving such deals.
