LONDON (Reuters) – Canada’s Barrick Gold (ABX.TO) has agreed to buy Randgold Resources Ltd (RRS.L) in a $18.3 billion share deal to create the world’s largest gold company by value and output in an industry under investor pressure to put capital to good use.
The new Barrick company, which will be listed in New York and Toronto, will own five of the world’s 10 lowest cost gold mines and will be valued at $24 billion including debt.
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.
“Randgold has the agility and swift-footedness of a younger and smaller company, much like Barrick in its early years while Barrick has the infrastructure and global reach of a large corporate company,” Barrick Chairman John Thornton said in a conference call.
Randgold boss Mark Bristow will become the chief executive of the new merged company while Thornton will be executive chairman. The merger terms value Randgold at 4.58 billion pounds ($6 billion), at 48.5 pound-a-share, according to Thomson Reuters data.