Lihir Gold announced that it has finally agreed to the renewed takeover bid from Newcrest Mining of Australia. In its latest bid Newcrest offered $A9.5 billion to Lihir. The combination of Lihir and Newcrest would create the fourth biggest gold company in the world valued at $A25 billion.

"The combined organization will be Asia-Pacific's leading gold producer, with a standout portfolio of long-life, high margin, tier one gold assets," said Don Mercer, chairman of Newcrest. Lihir had rejected the first offer of Newcrest. Newcrest first offered $A8.9 billion for the takeover of Lihir on April 1, 2010.

After the rejection of the offer by Lihir, Newcrest raised its offer by 6.4% to $9.5 billion. According to the new offer, Newcrest is now offering 22.5 cents cash per Lihir share and one Newcrest share for every 8.43 Lihir shares.

The new combined company is expected to produce around 2.8 million ounces of gold per year. Both the companies are already considering the plans to move the annual production to 3.75 million ounces. Lihir currently operates one of the largest gold mines in the world, on Lihir Island in Papua New Guinea, and also has sizable assets in Australia and West Africa. After the closing of the deal, the new company will reportedly have
10 mines in five countries, with six or seven separate gold regions.