Two of the world’s largest gold producers are set to merge as Canada’s Barrick Gold said it has agreed to buy London-listed Randgold Resources in a shock $18bn (£13.7bn) deal.
In plans to create what Barrick Gold and Randgold Resources hailed as an “industry-leading gold company”, the companies will be hoping to cement their footprints in most of north America and Africa after a challenging year for both firms.
It wold be the world's biggest gold miner with a value of about $18bn.
Randgold shares were up four per cent in early morning trading.
Barrick, which has suffered a dip in outfall, will own around two-thirds of the new company while Randgold, which has been hit by a strike at one of its biggest mines, will own around a third.
Mark Bristow, chief executive of Randgold, will become president and chief executive of the New Barrick Group.
In a joint statement the companies said: “The boards of Barrick and Randgold believe that the merger will create an industry-leading gold company with the greatest concentration of Tier One Gold Assets in the industry, the lowest total cash cost position among senior gold peers.”
A number of gold producers have struggled in the last year, with the growing strength of the US dollar making the commodity much more expensive for foreign buyers.
Randgold shares on the London Stock Exchange will be cancelled and New Barrick Group will be listed in Toronto and New York, operating under the branding of the Barrick Group.
Barclays and CIBC advised on the deal for Randgold and Morgan Stanley and M. Klein and Co. acted as advisers for Barrick.