A “glittering” deal creating the world’s largest gold miner

Today’s announcement that Canada’s Barrick Gold will enter into a share for share merger with Randgold Resources 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,” the companies said in a joint statement. The deal, reported to be worth around USD 18bn, will also be the biggest deal to date within the gold mining industry and will be the result of on and off discussions held between the two companies over the last three years, which have culminated in the last nine months or so, according to press sources.

The deal will bring together two companies that are considered to have complementary strengths; Barrick has some high-quality assets which are viewed as being under-utilised and Randgold is recognised as a company that is able to deliver strong shareholder returns, with the sum of the parts being a company that will be able to achieve better returns for its shareholders on those high-quality assets.