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Barrick and Randgold merger creates £14bn gold mine giant

Two of the world's largest gold miners have announced plans to merge in a deal that will create a global leader with a market value of £14bn.

Under the all-share agreement, Barrick Gold (Hanover: ABR.HA - news) of Canada would hold two-thirds of the new company which would also keep the Barrick name.

Randgold Resources' shareholders would hold the rest of the stock.

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

However, they also announced the new company's shares would be traded in New York and Toronto, meaning Randgold's London listing on the FTSE 100 would be cancelled if the deal went ahead, as planned, early next year.

Barrick executive chairman John L Thornton, who will retain the role, said: "The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry."

He added that it 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".

Randgold chief executive, Mark Bristow, will remain in his role at the enlarged company.

Its shares climbed 6% in the wake of the announcement. Barrick was also up 6% in Monday trading.

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

"Given recent headwinds, that is welcome."