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Eldorado Gold bids for European Goldfields to create new mid-tier producer (GLD, EGO, EGFDF)

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Despite gold (GLD , quote ) continuing to fall from investor favor, Eldorado Gold ( EGO , quote ) is purchasing European Goldfields LTD ( EGFDF , quote ) in a $2.4 billion deal.

The deal values European Goldfields at $12.50 a share, but Canada-based EGFDF was down 61 cents to close at $10.89, an odd reaction to a takeover bid.

Shareholders from both companies must approve of the deal.

The Wall Street Journal stated that the deal will create "the leading growth-oriented intermediate gold producer."

European Goldfields is active throughout southeast Europe. It holds 95% interest in Stratoni, a lead/zinc/silver mine located in northeastern Greece, as well as other assets in Greece and Romania.

While 2011 has been a good year for the yellow metal, the shine has been wearing off lately. For the week, it is down more than 4%. Over the last month, it is off over 7%.

But with central banks buying and consumers in India and China loading up on gold , it should be rising in price again over the long term .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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