HOLLYWOOD, Fla. (Reuters) – Barrick Gold Corp’s chief executive defended the world’s largest gold producer’s hostile $18 billion bid for Newmont Mining Corp, saying on Monday the deal is “logical” for an industry battling high costs and depleting resources.
Barrick, which recently completed a $6.1 billion acquisition of Africa-focused Randgold Resources, launched its all-stock bid on Monday, encouraging the U.S. rival to ditch a previously announced $10 billion takeover of Canada’s Goldcorp Inc.
“This gold industry needs to become more relevant to investors,” CEO Mark Bristow said in an interview on the sidelines of the BMO Global Metals & Mining Conference in Hollywood, Florida.
Bristow, known for his straight-talking and hands-on approach in running Randgold before the merger, said this deal “drives a further rationalization in our industry.”
Gold mergers and acquisitions have been scarce in recent years as companies focused on cutting costs in the face of investor criticism about capital management. But the need to bolster shrinking gold reserves to boost growth and take advantage of rising prices are providing the impetus for consolidation.