Barrick Gold has dropped its bid for rival Newmont after the two agreed to merge their Nevada mines, the companies confirmed today.
The two parties said they would create the world’s single largest gold producer with a combined output of over 4m ounces of gold last year. The deal promises to unlock $5bn in synergies, they said.
It comes after a war of words between chief executives Mark Bristow and Gary Goldberg as Barrick launched a hostile takeover bid for Newmont late last month.
Bristow called Goldberg a “loser”, while the Newmont chief executive hit back at the proposed deal as not being in the best interests of shareholders.
The $18bn (£14bn) takeover would have created the world’s largest gold miner, but would scupper Newmont’s preferred deal with another rival, Goldcorp.
The parties said today they would create a joint venture by combining their mining operations, assets, reserves and talent in Nevada.
“We listened to our shareholders and agreed with them that this was the best way to realise the enormous potential of the Nevada goldfields’ unequalled mineral endowment, and to maximise the returns from our operations there,” Barrick boss Bristow said.
When he launched the bid last month Bristow, a veteran of Randgold Resources which was bought by Barrick for $6bn last year, pointed to the Nevada assets as the “most important” reason for the deal.
Goldberg, who during the bid hit out at Bristow’s management team for lacking global operating experience, said the new agreement is an “innovative and effective way to generate long-term value.”
Barrick will own 61.5 per cent of the venture, with Newmont taking the rest.