Yahoo Finance Randgold and Barrick agree $18bn deal to create world’s biggest gold miner
London-listed Randgold Resources and Canada’s Barrick have agreed to merge in a deal worth more than $18bn (£14bn) that the companies say will create the world’s largest gold miner.
Randgold currently operates five gold mines in Africa, while Barrick runs mines in the US, Peru, Chile and Argentina.
Under the terms of the deal, the combined group will be known as the New Barrick Group.
Barrick and Randgold said the merger would create “an industry-leading gold company”, with the greatest concentration of tier one gold assets in the market.
Based on both firms’ share prices at the close of trading last on 21 September, the new company would have a market capitalisation of $18.3bn.
Mark Bristow, chief executive officer of Randgold, said: “Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital.
"The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions.
“By employing a strategy similar to the one that proved very successful at Randgold, but on a larger scale, the New Barrick Group will leverage some of the world's best mines and talent to create real value for all stakeholders."
John L. Thornton, executive chairman of Barrick, said the combination of the two groups would “create a new champion for value creation in the gold mining industry”.
He added: “Our overriding measure of success will be the returns we generate and not the number of ounces we produce, balancing boldness and prudence to deliver consistent and growing returns to our fellow owners, a truly simple but radical and achievable concept.
“There are no premiums in the merger because we strongly believe in the opportunity to add significant value for our shareholders from the disciplined management of our combined asset base and a focus on truly profitable growth."
Shares in Randgold rose more than 4 per cent in early trading on Monday, while Barrick’s stock edged up in after hours trading on the New York stock exchange.
