According to the British “Financial Times”, Barrick Gold, the world’s largest gold company, acquired South Africa’s Rand Gold Resources Company for $6 billion. Barrick Gold Executive Chairman John Thornton said the deal It will merge the world’s largest “Grade 1” gold assets with a market capitalization of US$18 billion.
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Under the agreement, Rand Gold shareholders will receive 6.128 shares of Barrick Gold in stock per share. The existing shareholders of Barrick will hold 64% of the combined company and become the largest shareholder. Randy Gold shareholders will hold the remaining 36%.
It is worth noting that in the past year, Barrick’s share price fell 25% and Rand Gold fell 34%.
Since mid-April this year, due to the impact of a strong dollar, hedging demand has flocked to the US dollar, pushing up the US dollar index and suppressing gold.
The two giants “shaking hands and saying joy” are also hoping to re-energize investors’ downturn in over-expenditure and poor earnings over the years. The data showed that after the merger, Land’s share price rose 5% to 51.19 pounds.
RAND CEO Mark Bristow also said that the new company’s goal will be to provide industry-leading returns, which will take a more rigorous review of the company’s asset base and how to conduct business, and do a good job. Prepare for a difficult decision.
According to publicly traded data, the combined new company will produce 6.5 million ounces of gold per year, which will further erode the US-listed competitor Newmont Mining.
The all-stock agreement price will set the price of RAND at around £49 per share, which is the closing price on Friday night. Shareholders also have the right to receive a dividend of $2. Barrick offered 6.128 shares per rand share and agreed to pay a $300 million break-up fee.
But analysts also said that the negotiations between the two companies’ heads, John Thornton and Bristol, will determine whether the deal is successful or not.
It is reported that Thornton will continue to serve as executive chairman of the expansion company, and Mr. Bristol will serve as the chief executive officer responsible for the daily operations of the mine.
However, the new company will be listed in Toronto and New York, which means London will lose its biggest gold stock.
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Royal Bank of Canada Capital Markets said that due to Rand’s African exposure, Barrick shareholders may not accept the merger well and may make the new company vulnerable to Newmont’s acquisition.
It is worth noting that Barrick told the Financial Times that as part of the deal, Shandong Gold, one of China’s largest gold producers, has agreed to buy Barrick’s 300 million shares of Barrick, and Barrick will also Purchase the equivalent shares of Shandong Mining, a subsidiary of Shandong Gold.