Barrick-Randgold Merger Creates World’s Biggest Gold Miner

SEATTLE (Scrap Monster): Canadian Barrick Gold has reached an agreement to purchase Jersey-headquartered Randgold Resources. The purchase deal worth $6.5 billion will lead to creation of a new mining entity worth around $18.3 billion. The merger is subject to approval by shareholders of both the companies, regulatory approvals and other customary closing conditions and is expected to close by Q1 2019.

As a result of the share-for-share merger, Barrick Gold shareholders will own approximately 66.6% of the combined entity, whereas the remaining 33.4% will be owned by Randgold shareholders on a fully-diluted basis. The merged company will own 5 out of the world’s top 10 tier 1 gold assets. Barrick Gold Chairman John Thornton will serve as the Executive Chairman of the merged entity, whereas Randgold Resources CEO Mark Bristow will become the President and CEO.

The big-ticket acquisition is likely to revive fading investor investment in the gold mining sector and spur more gold mining deals in future, industry analysts said. More such mergers are necessary to provide much-needed boost to the mining sector. For instance, they expect Barrick Gold to restart negotiations on acquisition of Newmont Mining Corp. assets. The merger deal had reached a deadlock in 2014 over differences in leadership among other factors.

The combination of Barrick and Randgold is expected to create a new champion for value creation in the gold mining industry.