(Ecofin Agency) - Today, September 24, 2018, Barrick Gold and Randgold Resources announced they had reached an $18.3 billion merger agreement. The two companies with operations in Africa recommend their shareholders to approve the transaction, which should be concluded in Q1, 2019.
According to the terms of the agreement, each of Randgold’s shareholders will receive 6.1280 shares in Barrick Group, the new entity created by the merger. Overall, Barrick’s shareholders will own 66.6% of the new entity and Randgold’s 33.4%. Mark Bristow, Randgold’s CEO, will become New Barrick Group’s CEO while John Thornton (photo), currently Barrick Gold’s executive president, will be the new entity’s executive president.
“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”, Thornton said commenting on the merger.
Barrick Gold, the current world-leading gold producer, merging with Randgold, one of its direct competitors, is a great opportunity to consolidate its leadership. The Canadian company will also share Randgold’s experience in the management of Africa’s difficult mining environment by these times when almost all African countries are revising their mining codes to derive more profits from their natural resources.
Let’s note that for more than a year now, Barrick Gold’s subsidiary Acacia Mining has been dragging an issue with Tanzania which imposed an embargo on its raw ore exports.