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ASX 200 down 0.2%: Northern Star & Saracen announce mega merger, IAG settles class action

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak. The benchmark index is currently down 0.2% to 5,928.7 points.

Here’s what is happening on the market today:

Northern Star-Saracen Mineral mega merger.

Both the Northern Star Resources Ltd (ASX: NST) share price and the Saracen Mineral Holdings Limited (ASX: SAR) share price are storming higher on Tuesday after the gold miners announced a mega merger to create a $16 billion gold mining giant. Management notes that the merger will create a top 10 global gold company targeting production of 2 million ounces of gold per annum exclusively in tier-1 locations. It also expects the merger to result in unique pre-tax synergies of $1.5 billion to $2 billion.

IAG announces class action settlement.

The Insurance Australia Group Ltd (ASX: IAG) share price is dropping lower on Tuesday after announcing that it has settled a class action brought against it by Johnson Winter & Slattery. According to the release, the class action related to add-on insurance products sold through motor vehicle and motorcycle dealers. Insurance Australia has agreed to pay $138 million, which remains subject to approval by the Federal Court of Australia. Inclusive of all related costs and after insurance recoveries, IAG anticipates a net after tax impact from this settlement of less than $50 million.

BHP increases Shenzi stake.

The BHP Limited (ASX: BHP) share price is trading lower today after announcing an agreement to acquire an additional 28% working interest in the Shenzi development in the deepwater Gulf of Mexico. BHP has agreed a purchase price of US$505 million. This deal will increase the mining giant’s working interest to 72% and immediately add approximately 11,000 barrels of oil equivalent per day of production.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Tuesday has been the Northern Star share price with a 7% gain following its merger announcement. The worst performer has been the Mirvac Group (ASX: MGR) share price with a 3.5% decline on no news. A number of property companies have come under pressure today.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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