Barrick to buy Randgold for $18.3B forming giant global gold miner

Mark Bristow,CEO of Randgold will become CEO of the new Barrick Group

John Thornton, the former Goldman Sachs executive and executive chairman of Barrick, will become executive chairman of the combined business.

Randgold chief executive, Mark Bristow, will remain in his role at the enlarged company. Randgold shareholders will hold the rest.

Each Randgold Shareholder will receive: 6.1280 new Barrick shares for each Randgold share.

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 new Barrick, valued at $24 billion including debt, would be now the world's top gold miner by value and output, with a dominant position in Africa.

"The boards of Barrick Gold Corporation and Randgold Resources Limited are pleased to announce that they have reached agreement on the terms of a recommended share-for-share merger.to create an industry-leading gold company", read the statement.

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.

"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".

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The deal values Randgold shares at about £49, its closing price on Friday.

Bristow, a 59-year old trained geologist, has been at the helm of Randgold since its inception in 1995 and is known for his straight-talking, hands-on approach to running the company.

The current spot gold price is not helping the sector, having lost out on traditional safe-haven flows to the dollar, pushing it 10 percent lower this year.

The combined company claims it. The company shed non-core assets outright, or sold stakes to partners, to fix its balance sheet, after its debt peaked at $15.8 billion in 2013.

The merger between Barrick and Randgold remains subject to shareholder approval.

Randgold has operations in Mali, Senegal, the Democratic Republic of Congo and Ivory Coast.

Barrick's more stable North American assets will reduce Randgold investors' exposure to risky African markets.

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