Gold miner Randgold unveils £13.7bn merger with Barrick

Mark Bristow speaks during a news conference at Tongon Gold Mine in the Korhogo region Ivory Coast Apri

The two companies said they were aligned on their strategy with Chinese investors after Barrick said it would make a bigger push to attract investors in China.

Monday's news sent Randgold's share price soaring 5.79 percent to 5,208 pence in late morning deals on London's falling FTSE 100 index.

Both Thornton and Randgold's Chief Executive Officer Mark Bristow are outspoken leaders with strong visions.

The combination creates an $18.3 billion gold-mining giant. Randgold shareholders will hold the rest.

The company will be listed in NY and Toronto, which means that London will lose its biggest gold stock, but it will own five of the world's 10 lowest cost gold mines, producing more than 6.5 million ounces of the precious metal a year.

Mark Bristow will become the President and CEO of the New Barrack Group. Randgold's London listing will be cancelled.

Its shares were trading 6% higher in the wake of the announcement.

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"The 59-year-old has arguably reached the pinnacle of his career with this deal, yet he will be under considerable pressure to make sure shareholders are not left with an inferior company to a standalone Randgold".

Each Randgold investor would receive, the pair said, 6.1280 new Barrick shares for every Randgold share.

Barrick's gold production fell to 5.3 million ounces in 2017, from more than 8 million ounces a decade earlier, according to data compiled by Bloomberg.

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 company shed non-core assets outright, or sold stakes to partners, to fix its balance sheet, after its debt peaked at $15.8 billion in 2013.

Talks on the deal, which is still subject to regulatory and shareholder approvals and scheduled to close in the first quarter of 2019, started more than three years ago with advisors taken in July, a person familiar with the talks told Reuters.

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.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "From Randgold's perspective the deal diversifies exposure away from high-risk African markets and towards Barrick's more stable North American assets".

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