Agnico Eagle Mines Limited (NYSE:AEM) entered into agreement to acquire Kirkland Lake Gold Ltd. (TSX:KL) in a merger of equals transaction for CAD 13.5 billion on September 28, 2021. Pursuant to the Merger Agreement, Kirkland Lake Gold shareholders will receive 0.7935 of an Agnico Eagle common share for each Kirkland Lake Gold common share held. As of October 27, 2021, the merger agreement is amended to remove any payment of cash to Kirkland shareholders in respect of any fractional Agnico shares issuable pursuant to the arrangement. The issuance of shares by Agnico Eagle under the Merger is subject to the approval of a simple majority of votes cast by Agnico Eagle shareholders at a special meeting of Agnico Eagle?s shareholders. Upon closing, existing Agnico Eagle and Kirkland Lake Gold shareholders will own approximately 54% and 46% of the combined company, respectively. The transaction represents a true merger of equals, with the business of both companies to benefit from the significant financial strength of the merged company. Following completion of the Merger, the shares of the new Agnico Eagle will continue to trade on the Toronto Stock Exchange and the New York Stock Exchange, subject to approval or acceptance of each exchange in respect of the Agnico Eagle shares being issued as part of the Consideration and Kirkland Lake Gold?s shares will be de-listed from the Toronto Stock Exchange, the New York Stock Exchange, and the Australian Securities Exchange following closing. Post completion of the acquisition, the combined company to continue under the name ?Agnico Eagle Mines Limited?. The Merger Agreement includes reciprocal non-solicitation provisions, a reciprocal CAD 568.5 million ($450 million) termination fee and a CAD 25.3 million ($20 million) expense reimbursement payable in certain circumstances. Upon closing of the Merger, the Company is expected to have CAD 2.9 billion ($2.3 billion) of available liquidity, a mineral reserve base of 48 million ounces of gold (969 million tonnes at 1.53 grams per tonne), which has doubled over the last 10 years, and an extensive pipeline of development and exploration projects to drive sustainable, low-risk growth.
On closing, the senior executive team and Board of Directors of Agnico Eagle will be enhanced by the addition of new members from Kirkland Lake Gold who all have a wealth of knowledge and experience to support the combined operations. The Board of Directors of the new Agnico Eagle will consist of 13 directors, comprised of 7 directors of Agnico Eagle and 6 directors from Kirkland Lake Gold. The key senior management team and directors will include: Executive Chair of the Board? Sean Boyd, Chief Executive Officer ? Tony Makuch, President ? Ammar Al-Joundi, Vice-Chair of the Board ? Jeffrey Parr, Lead Director ? Jamie Sokalsky. The combined company will continue to be operated under the new Agnico Eagle brand and headquartered at Agnico Eagle?s existing head office and will be led by a proven leadership team that builds on the strengths and capabilities of both companies. The new Agnico Eagle will be led by a combined board and management team of experienced mining and business leaders, bringing together the proven cultures, strengths and capabilities of both companies.
The transaction is subject to require the approval of at least 66 2/3% of the votes cast by the shareholders of Kirkland Lake Gold voting at a special meeting of Kirkland Lake Gold?s shareholders and 50% of Agnico Eagle shareholders. The Merger is also subject to closing conditions customary in transactions of this nature, including receipt of Competition Act (Canada) and Foreign Acquisitions and Takeovers Act 1975 (Cth) (Australia) clearance, approval of the Australian Foreign Investment Review Board (FIRB), Ontario court approval and applicable stock exchange approvals, the consideration shares to be issued pursuant to the arrangement have been conditionally approved or authorized for listing on the TSX and the NYSE, Kirkland shareholders shall have not validly exercised Dissent Rights in connection with the arrangement with respect to more than 5% of the issued and outstanding Kirkland shares, Agnico and Kirkland shall have received all of the Kirkland and Agnico Support and Voting Agreements respectively executed by the Supporting Shareholders. The Board of Directors of both Agnico Eagle Mines and Kirkland Lake Gold have unanimously approved the acquisition. The Board of Directors of both Agnico Eagle and Kirkland Lake Gold recommends their respective shareholders to vote in favour of the Merger. On September 28, 2021, Agnico Eagle Mines Limited and Kirkland Lake Gold Ltd, concurrently entered into execution and delivery of support and voting agreement. The Toronto Stock Exchange has conditionally approved the listing of the Agnico Shares to be issued in connection with the merger, the merger has been approved under the Competition Act (Canada), and exemptive relief has been granted by the Australian Securities and Investments Commission from compliance with certain prospectus and share sale requirements. Kirkland Lake Gold appointed a special committee of independent directors to consider and make a recommendation with respect to the Merger. Kirkland Shareholders must vote before on November 24, 2021. Holders of Kirkland CDIs must complete their voting instructions before 11:00 a.m. (Toronto time) on November 23, 2021 in order to allow sufficient time to collate the votes of such holders and submit them to Kirkland Lake Gold's transfer agent prior to the proxy cut-off time. It is anticipated that both shareholder meetings will take place in the fourth quarter of 2021. As of October 27, 2021, it is anticipated that both shareholder meetings will take place on November 26, 2021. The transaction is expected to close in December 2021 or in the first quarter of 2022. Consolidation within the Abitibi will also provide the new Agnico Eagle with significant value creation opportunities through synergies and other business improvement initiatives.
TD Securities Inc. and Merrill Lynch Canada, Inc. have provided financial opinions and acted as financial advisors and Trinity Advisors Corporation acted as financial advisor and Patricia L. Olasker and Matthew Milne-Smith of Davies Ward Phillips & Vineberg LLP acted as legal advisor to Agnico Eagle?s Board of Directors. BMO Nesbitt Burns Inc. and Maxit Capital LP have each provided fairness opinions and acted as financial advisors and Jamie Litchen, Jay Goldman,?Jeffrey P. Roy,?Paul M. Stein,?Jonathan Sherman, Jonathan J. Chandler,?Michael Rosenbloom,?Shannon Scrocchi,?Thea Gaertner,?Layla Makhzoumi,?Christopher B. Norton,?Chris Hersh,?Jennifer Wasylyk,?Lauren Grossman,?Arend J.A. Hoekstra, Lara Jackson, John Picone and?Ryan R. Moore of Cassels Brock & Blackwell LLP acted as legal advisors to the Kirkland Lake Gold Board of Directors. CIBC World Markets Inc. has provided a fairness opinion and acted as financial advisor and John Turner and Brad Freelan of Fasken Martineau DuMoulin LLP acted as legal advisors to the Kirkland Lake Gold special committee. CHESS Depositary Nominees Pty Limited acted as depository for Kirkland shareholders. Computershare Investor Services Pty Limited acted as information agent to Kirkland CDI holders. Computershare Trust Company of Canada acted as transfer agent to Agnico while TSX Trust Company acted as transfer agent to Kirkland. Computershare Investor Services Inc. acted as depository to Agnico and Kirkland. Laurel Hill Advisory Group acted as proxy solicitation agent to Agnico for an estimated fee of at least CAD 250,000 while Kingsdale Partners LP acted as proxy solicitation agent to Kirkland for an estimated fee of at least CAD 350,000. BofA Securities, Inc. acted as financial advisor and fairness opinion provider to Agnico.