It’s a US$6-billion gold mining deal with seemingly no synergies. Usually when a large takeover is unveiled, the acquirer will try to sell the deal to its shareholder base by talking up “synergies” – management speak for cost-cutting.
But such talk was absent from both the regulatory documents released with the announcement and presentations of both Barrick Gold Corp. and Randgold Resources Ltd. during two separate, hour-long conference calls on Monday.
So where’s the fat with the Barrick takeover of Randgold, a combination one analyst dubbed “Brandgold?” Part of the answer is there’s not that much fat to trim.
Barrick has spent the past few years slimming down, or as executive chairman John Thornton has said multiple times, trying to go “back to the future” – becoming more like the Barrick of old, when it was a much smaller, nimbler and more efficient operation. It has sold many non-core assets, cut jobs and trimmed its management structure significantly since 2013.
But the world’s biggest gold producer is not entirely all the way there yet – and certainly isn’t in the league of Randgold, recognized as a model of efficiency.