Barrick Gold Corporation has reached an agreement on the terms of a recommended share-for-share merger of Barrick and Randgold Resources Limited.
Subject to approvals by both shareholders, regulatory approvals and other customary closing conditions, the merger will create an industry-leading gold company with the greatest concentration of Tier One Gold Assets in the industry.
Following the completion of the merger, Barrick Shareholders will own approximately 66.6 per cent and Randgold Shareholders will own approximately 33.4 per cent of the New Barrick Group.
John L. Thornton, Executive Chairman of Barrick 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.
“Our overriding measure of success will be the returns we generate and not the number of ounces we produce, balancing boldness and prudence to deliver consistent and growing returns to our fellow owners, a truly simple but radical and achievable concept,” Mr Thornton said.
“There are no premiums in the merger because we strongly believe in the opportunity to add significant value for our shareholders from the disciplined management of our combined asset base and a focus on truly profitable growth,” he explained.
Also commenting on today’s announcement, Mark Bristow, Chief Executive Officer of Randgold, said that the resources industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital, but this merged company will be ‘very different’.
“Its goal will be to deliver sector-leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business and be prepared to make tough decisions,” Mr Bristow shared, “by employing a strategy similar to the one that proved very successful at Randgold, but on a larger scale, the New Barrick Group will leverage some of the world’s best mines and talent to create real value for all stakeholders.”
The merger is expected to close by Q1 2019. Following completion of the merger:
- John L. Thornton, Executive Chairman of Barrick, will become Executive Chairman of the New Barrick Group.
- Mark Bristow, Chief Executive Officer of Randgold, will become President and Chief Executive Officer of the New Barrick Group.
- Graham Shuttleworth, Finance Director and Chief Financial Officer of Randgold, will become Senior Executive Vice President and Chief Financial Officer of the New Barrick Group.
- Kevin Thomson, Senior Executive Vice President, Strategic Matters of Barrick, will become Senior Executive Vice President, Strategic Matters of the New Barrick Group.
- Two-thirds of the directors of the Board of the New Barrick Group will be nominated by Barrick, and one-third will be nominated by Randgold.