Miner Barrick agrees to buy Randgold to create $18b gold giant

Canadian mining giant Barrick Gold agreed Monday to buy Africa-focused rival Randgold Resources to create a global industry champion worth $18.3 billion.

The blockbuster all-share deal was described as a merger but is effectively a takeover because Barrick investors will own a majority 66.6-percent stake. Randgold shareholders will hold the rest.

The enlarged company, keeping the Barrick name, will be traded in New York and Toronto. Randgold's London listing will be cancelled.

The group will have a combined stock market capitalisation of $18.3 billion (15.6 billion euros) and annual revenues of approximately $9.7 billion.

"The boards of Barrick Gold Corporation and Randgold Resources Limited are pleased to announce that they have reached agreement on the terms of a recommended share-for-share merger ... to create an industry-leading gold company," read the statement.

Barrick executive chairman John L. Thornton will take up the same role at the new company, while Randgold chief executive Mark Bristow will retain his CEO position.

"The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry," said Thornton in the statement.

He added that the gigantic deal would bring "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".

Bristow acknowledged that the industry has long been criticised for its "short-term focus, undisciplined growth and poor returns".

He added: "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.