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Randgold
Canada 's Barrick Gold buys Randgold Resources, creating the world' s largest gold miner, worth about $ 18 billion (14 billion pounds).
The companies own some of the most valuable gold deposits in the world, producing more than 6.6 million ounces of gold per year.
Barrick's shareholders will eventually own two-thirds of the combined business and Randgold will own the remaining third.
Shares of both companies have fallen nearly 30% this year, due to falling gold prices and questions about their strategy.
"Our industry has been criticized for its short-term goal, unruly growth and low returns on invested capital.The merged company will be very different," said Mark Bristow, Managing Director of Randgold.
"Its goal will be to generate top-notch returns in the sector and to achieve this we will need to have a very critical view of our assets and business, and be ready to make tough decisions," he said. added.
The price of gold has dropped more than 8% this year, putting all the producers of gold under pressure.
Barrick and Randgold hope their combination will reduce costs and increase profit margins.
Analysts also say Barrick's mines in relatively stable countries supplement Randgold's assets in riskier locations.
"From Randgold's point of view, the deal diversifies exposure to the high-risk African markets and Barrick's more stable North American assets – recent hurdles are welcome," said Nicholas Hyett. , analyst at Hargreaves Lansdown.
However, other analysts were less impressed by the deal.
"A very defensive move – production is really down and their shares [Randgold and Barrick] have really taken a shot, "said Neil Wilson, financial analyst at Markets.com.
"For Barrick, access to Africa is important because they do not really have that expertise and have struggled there, but it might not be as good with Barrick shareholders if they would rather stick to it. to other markets, "he added.
The new company will retain the name Barrick and will be listed in New York and Toronto, while Randgold's listing in London will be canceled.
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