There are a lot of strange new diseases in the world these daysWest Nile virus, monkey pox and SARS. Physicians and scientists struggle merely to contain the new plagues; the hope of curing or preventing them seems far off.
But there is also a familiar old maladygold fever. No one is trying to cure that, which pleases us. The latest case seems to have struck South Africa's AngloGold in a big way. If it and Ashanti Goldfields of Ghana can come to an agreement, the combined company would be the world's largest gold producer. Estimated output is in the neighbourhood of 7.6 million oz. (As things now stand, the largest producer, Newmont, churns out between 7.1 million and 7.3 million oz each year.)
The most probable scenario pegs the cost of the deal at US$983 million. Anglo would offer 26 of its shares for every 100 shares of Ashanti. Talks between the two companies are said to be at an advanced stage, but there is no hard news on either of their web sites.
If AngloGold were to merge with Ashanti, the move is seen by some as the strategy of AngloGold's parent company, Anglo American, to expand its interests outside South Africa. Lonmin of London, U.K., holds 28% of Ashanti, and admits it has been in talks with AngloGold. However, the Ghanaian government holds 17% of Ashanti and the power to veto any merger.
This is not the final word on this deal. There is room yet for another gold producer to step in, presumably with a better offer. Gold fever might turn out to be rather contagious.