On September 24, Barrick Gold (ABX) agreed to acquire Randgold Resources (GOLD) in a share-for-share deal. The merger would create an industry-leading gold company (GDX) with the greatest concentration of tier one gold assets.
Based on their closing prices on September 21, the new Barrick Gold would have an aggregate market capitalization of $18.3 billion.
Terms of the merger
Under the terms of the merger, Randgold Resources shareholders will receive 6.128 new Barrick Gold shares for each Randgold share. After the completion of the merger, Barrick shareholders will own ~66.6% of the new Barrick Gold on a fully diluted basis, and Randgold shareholders will own ~33.4%.
What the companies are saying
Barrick’s executive chairman John Thornton said “The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world’s largest collection of Tier One Gold Assets, with a proven management team that has consistently delivered among the best shareholder returns in the gold sector over the past decade.”
Randgold’s CEO Mark Bristow believes the new company will be able to leverage the world’s best mines to create real value for shareholders.
The merger is expected to close by the first quarter of 2019. Thornton will then become executive chairman of the new Barrick Gold, and Bristow will become the CEO and president. The new company will remain listed in New York and Toronto, and Randgold’s London listing will be canceled.