Canada’s Barrick Gold Corporation has announced that it has reached an agreement on creating a share-for-share merger between Barrick and Randgold Resources Limited, in a major deal worth US$18.3bn
Barrick shareholders will own approximately 66.6 per cent while Randgold Shareholders will own approximately 33.4 per cent.
John L Thornton, executive chairman of Barrick, will retain the title of executive chairman of the New Barrick Group.
He said, “The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing 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 merger is expected to close by the first quarter of 2019.
Mark Bristow, who will become president and chief executive officer of the New Barrick Group, 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.”
Ownership of five of the world’s top ten tier one gold assets include Cortez and Goldstrike in Nevada, north America, Kibali in the Democratic Republic of Congo (45 per cent), Loulo-Gounkoto in Mali, (80 per cent) and Pueblo Viejo in Dominican Republic (60 per cent).
