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Randgold Resources and Barrick have agreed to an $18 billion (£14 billion) merger, creating the world’s largest gold miner.
The London-listed Randgold five gold mines in Africa whilst Canada’s Barrick operates in the US, Peru, Chile and Argentina.
“Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital,” said Mark Bristow, the chief executive officer of Randgold.
“The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions.”
“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.”
John L. Thornton, executive chairman of Barrick, said: “Our overriding measure of success will be the returns we generate and not the number of ounces we produce, balancing boldness and prudence to deliver consistent and growing returns to our fellow owners, a truly simple but radical and achievable concept.”
“There are no premiums in the merger because we strongly believe in the opportunity to add significant value for our shareholders from the disciplined management of our combined asset base and a focus on truly profitable growth.”
The combined group will be renamed The New Barrick and will retain a listing in Toronto and New York but delist from the London Stock Exchange.
Under the deal, Randgold shareholders will be given 6.1280 shares in the combined company for each share they own.
Shares in Barrick (NYSE: ABX) are down 1.32 percent at 10,47. Shares in Randgold are up 3.84 percent at 5.112,00 (0948GMT).