May 19, 2020

Barrick launches $18bn bid for Newmont

Barrick Gold
mining
Mark Bristow
Mark Bristow
Dan Brightmore
3 min
Barrick launches $18bn bid for Newmont

Barrick Gold has officially announced its intention to make a $18bn bid for rival Newmont Mining. The all-share transaction would create the world’s largest gold company. 

Barrick CEO Mark Bristow commented: “The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of Tier 1 gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering growth.”

However, the announcement of what amounts to a hostile takeover bid from Barrick, was not warmly received by Newmont’s outgoing boss Gary Goldberg. Speaking at the BMO Capital Markets Global Metal & Mining Conference in Florida this week, he highlighted Barrick’s “unsolicited, negative premium proposal” and reinforced his board’s commitment to delivering superior value for shareholders:

“Our team has proven track record of successfully managing and operating a global mining portfolio, delivering total shareholder returns of 65% since January of 2014 compared with Randgold's anaemic 9% and Barrick's shocking negative 22% over that same period. 

“The current Barrick management team has only been together for 8 weeks and has never collectively managed to the global portfolio of our scale, complexity or quality. We have delivered, they simply, have not. We have the global mining and management experience, they simply do not.”

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Barrick’s intentions follow last month’s announcement from Newmont of its plans to combine with Goldcorp. Goldberg gave an update on this at the Florida conference:

“We announced our agreement to combine with Goldcorp in January, following extensive due diligence and our intention to create the world's leading gold business. Newmont-Goldcorp will operator a world-class portfolio of assets in 4 continents, leveraging our proven and scalable operating model. 

“We'll target sustainable and profitable gold production of between six million and seven million ounces per year and expect to enhance annual revenues by another $1.5bn through silver, zinc and copper production. Combining forces will also gave us the gold sector's best project and exploration pipelines in terms of quality and depth. 

“These prospects translate to the sector's largest reserve and resource base and an exceptional long-term leverage to the gold price. Equally important, we'll continue to have the financial flexibility we need to execute our capital priorities, deliver an industry-leading dividend and maintain an investment-grade balance sheet. We expect the transaction to close in the second quarter following our special stockholder meetings in April and receipt of all necessary regulatory approvals. And we're gratified to have received the Canadian Competition Bureau's clearance.”

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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