China National Gold Group Corp, the country's largest gold producer, confirmed Wednesday that it has halted talks with Canada's Barrick Gold, the world's largest gold producer, over the possible takeover of Barrick's unit in Africa, for the purpose of risk prevention.
"We will not continue talks with Barrick Gold about the takeover after weighing the potential returns to our company. We decided to end the talks in order to avoid risk," Wu Zhanming, head of the Overseas Operations Department at China National Gold, told the Global Times Wednesday.
Wu said the failure of the takeover will not affect the group's existing plan of "going global", but declined to comment further on the aborted takeover.
On Tuesday, Barrick Gold announced the end of discussions with China National Gold regarding selling its stake in its unit African Barrick Gold.
"These discussions were part of our ongoing efforts to identify opportunities to optimize our portfolio, however we are approaching this in a prudent and disciplined manner and will only proceed with opportunities that generate acceptable value for Barrick," Barrick's Chief Executive Jamie Sokalsky said in a statement published on the company's website.
Barrick Gold, which holds a 74 percent stake in African Barrick, said in August it was in preliminary talks with China National Gold about the possible sale of all or part of its stake.
The cost of the proposed acquisition was $3.4 billion, lower than the market speculation of $3.9 billion, the Guangzhou-based 21st Century Business Herald reported Tuesday, citing an unnamed source.
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