(Bloomberg) -- US gold giant Newmont Corp. has sweetened its record bid for Australian rival Newcrest Mining Ltd., bringing closer the prospect of a new precious metal behemoth.

The revised takeover offer, valued at A$29.4 billion ($19.5 billion), comes two months after Newcrest rejected Newmont’s earlier $17 billion all-stock deal. Shareholders and analysts alike say the transaction looks much more likely to move forward following the boosted bid.

“It’s clear that this is an improvement,” said Simon Mawhinney, chief investment officer of Allan Gray Australia Pty Ltd., the second-biggest shareholder in Newcrest behind BlackRock Inc., according to data compiled by Bloomberg. “Even though I feel the market, and possibly Newmont, underappreciates Newcrest’s assets, I don’t feel anywhere near aggrieved enough to try and scupper a transaction like this.”

Read More: Newcrest’s No. 2 Shareholder ‘Positively Disposed’ to Newmont Bid

The deal — the largest gold mining takeover ever, if completed — is key to Newmont’s efforts to extend its lead over other bullion mining rivals like Barrick Gold Corp. It would also increase Newmont’s exposure to copper, a key material in the clean energy transition, at a time when analysts are predicting major shortages of the wiring metal over the coming decade. Newcrest wants copper to make up more than 50% of revenue by the end of the decade, up from around a quarter now.

“Together as the clear gold-mining leader, we would be well-positioned to generate strong, stable and lasting returns with best-in-class sustainability performance for decades to come,” Newmont Chief Executive Tom Palmer said in a statement.

The Australian miner jumped on the news, closing 5.2% higher at A$29.74 in Sydney. Newmont shares dropped 0.4% to $50.87 as of 11:34 a.m. in New York on Tuesday. 

Newcrest hasn’t commented on the revised bid, though it confirmed it had opened its books for “confirmatory due diligence.” The deal still has several hurdles to cross, including securing a recommendation from Newcrest’s board. Due diligence is expected to take approximately four weeks. Newmont has indicated its offer is its “best and final.”

Under the terms of the revised offer, Newcrest shareholders would receive 0.4 shares in the world’s largest gold miner for each one held. The deal also allows Newcrest to pay a special dividend of up to $1.10 per share. That adds up to a combined implied value of A$32.87 per share, representing a more than 46% premium to Newcrest’s price before the original February bid.

Dividend

The dividend component of the proposal takes advantage of an Australian tax law that grants domestic shareholders in local companies tax credits, but would not be available following the acquisition by the US company. These credits — based on the principal that corporation tax and personal income tax are interchangeable — can be “incredibly attractive to Australian-domiciled shareholders,” Mawhinney said, adding it was a key reason he liked the offer.

Analysts read the boosted offer as a promising sign. “We believe this offer will be sufficient to progress the transaction,” said Jefferies analysts led by Christopher LaFemina. Morgans Financial analyst Sharad Bhat described the offer as a “reasonable” price, while BMO Capital Markets analyst Jackie Przybylowski wrote that “the transaction now looks much more likely to be completed.”

Dealmaking activity in the mining sector has ramped up in recent months, after two years of rising commodity prices left many mining companies awash with cash but still short of future production. Last week, Canadian miner Teck Resources Ltd. rejected a takeover bid from Anglo-Swiss commodities giant Glencore Plc for $23 billion. Glencore has since stepped up its pursuit of Teck with a new takeover proposal.

Newmont’s offer follows other large gold deals including the $5.2 billion takeover of Yamana Gold Inc. and Agnico Eagle Mines Ltd.’s $10.4 billion takeover of Kirkland Lake Gold Ltd. a year ago.

Newcrest is being advised by JPMorgan Chase & Co. and Gresham Advisory Partners Ltd. Newmont has engaged BofA Securities, Centerview Partners LLC and Lazard Ltd. as its financial advisers.

--With assistance from Harry Brumpton and Sybilla Gross.

(Adds additional analyst comments throughout. An earlier version corrected spelling of Agnico Eagle Mines)

©2023 Bloomberg L.P.