Gold miners Randgold and Barrick agree $18bn all-share merger

Barrick Gold Executive Chairman John Thornton

Barrick Gold Executive Chairman John Thornton

Canada's Barrick Gold is buying Randgold Resources, creating the world's biggest gold miner with a value of about $18bn (£14bn). Shareholders in Barrick will own about 66.6 per cent of the merged company, which will combine Randgold's African mines with Barrick's holdings in the Americas. Randgold shareholders will hold the rest.

The new company will keep the Barrick name and be listed in NY and Toronto, while Randgold's London listing will be cancelled.

Barrick's majority-owned Acacia Mining Plc has been stuck in limbo after Tanzania imposed a ban on exports of mineral concentrates in 2017 and slapped a US$190 billion tax bill on the London-listed company.

The group will have a combined stock market capitalisation of $18.3 billion (15.6 billion euros) and annual revenues of approximately $9.7 billion.

As part of the deal, China's Shandong Gold, one of the country's biggest gold producers, has agreed to buy $300 million of shares in Barrick.

Barrick executive chairman John Thornton will hold the same role at New Barrick while Randgold chief executive Mark Bristow, who co-founded the company in 1995, will become CEO of the combined company.

In a statement, the companies said the deal would create a gold miner with the greatest concentration of so-called tier assets in the industry.




He added that the big deal would bring "together the world's largest collection of tier one gold assets, with a proven management team that has consistently delivered among the best shareholder returns in the gold sector over the past decade".

The deal marks the biggest transaction in years in the gold mining industry, where companies have come under fire from investors for poorly managing capital, forcing them to focus on costs while dampening enthusiasm for acquisitions.

He added: "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".

Two-thirds of the directors of the board of the new Barrick will be nominated by Barrick and one-third by Randgold.

Randgold shareholders will receive 6.1280 new Barrick shares for every Randgold share under the terms of the deal.

The companies are reported to have been talking about a possible tie-up for three years...

The deal value, at 48.5 pound-a-share, matched Randgold's market capitalization as of Friday's close.

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