Barrick Gold agrees to buy rival Randgold in all-share deal

У світі з'явиться найбільша золотовидобувна компанія

The new company will have the sector's highest adjusted earnings before interest, tax, depreciation and appreciation and EBITDA margin of almost 50 percent based on 2017 numbers, and the lowest total cash cost position among its peers, the companies said.

The deal value, at 48.5 pound-a-share, matched Randgold's market capitalization as of Friday's close.

Under the terms of the deal, each Randgold shareholder will receive 6.1280 new Barrack shares for each Randgold share held, according to Dow Jones Newswires. John L. Thornton, executive chairman of Barrick, will become executive chairman of the new Barrick Group; Mark Bristow, CEO of Randgold, will become CEO of the new Barrick Group.

Thornton will remain as executive chairman, directing strategy and Bristow will be president and chief executive of the merged company, running day-to-day operations.

The deal will also give Barrick a much bigger presence in Africa, where Randgold has mines in Mali, Senegal, Côte d'Ivoire and the Democratic Republic of Congo.

The price of gold has fallen more than 8% this year, putting all gold producers under pressure.

The new company will keep the Barrick name and be listed in NY and Toronto, while Randgold's London listing will be cancelled.

Bristow added on another call that the new company would be open to weighing options for its Nevada and Australia assets, and said there had expressions of interest on the latter. Randgold Chief Financial Officer Graham Shuttleworth will become CFO of the new company.

The massive merger comes during a tough year for the gold industry. The strategies of the two companies are similar. "Both aim to generate free cash flow even if gold prices drop to as low as $1,000 an ounce", said Bloomberg News. They also have high internal "hurdle" rates for investment; in Barrick's case they must generate an internal rate of return of 15 per cent and in Randgold's 20 per cent.

The new Barrick, valued at $24 billion including debt, would be now the world's top gold miner by value and output, with a dominant position in Africa.

"From Randgold's perspective the deal diversifies exposure away from high-risk African markets and towards Barrick's more stable North American assets". Newmont didn't immediately respond to an emailed request for comment outside usual office hours. Randgold's London listing will be cancelled.

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