* Shares in Randgold, Barrick jump
* Deal valued at $18.3 bln excluding debt
* Shares in new company to be listed in New York, Toronto
* GRAPHIC-Randgold, Barrick shrs vs gold: (Adds quote from Barrick shareholder; updates Barrick shareprice)By Zandi Shabalala, Justin George Varghese and Clara Denina
LONDON, Sept 24 (Reuters) - Canada's Barrick Gold Corp has agreed to buy Randgold Resources Ltd in anall-stock deal valuing the Africa-focused miner at $6.5 billion,to create the world's largest gold producer in an industry underinvestor pressure to put capital to good use.The new Barrick company, which will be listed in New Yorkand Toronto, will own five of the world's 10 lowest-cost goldmines and have a market value of $19.4 billion based on Monday'strading. That would make it the world's biggest gold miner bymarket capitalization, overtaking Newmont Mining Corp ,according to Reuters calculations.The deal marks the biggest transaction in years in the goldmining industry, where companies have come under fire frominvestors for poorly managing capital, forcing them to focus oncosts while dampening enthusiasm for acquisitions.Randgold shares closed up 6 percent, making it the biggestgainer in London's wider mining index and valuingit at 4.93 billion pounds ($6.5 billion). Shares of Barrick, theworld's second-largest gold producer, closed up 5.8 percent inToronto."Randgold has the agility and swift-footedness of a youngerand smaller company, much like Barrick in its early years, whileBarrick has the infrastructure and global reach of a largecorporate company," Barrick Chairman John Thornton said in aconference call.Randgold's long-term boss Mark Bristow will become the chiefexecutive and president of the merged company, taking chieffinancial officer Graham Shuttleworth with him. Thornton, anex-Goldman Sachs banker, will be executive chairman.Bristow, a 59-year-old trained geologist, has been at thehelm of Randgold since its inception in 1995 and is known forhis straight-talking, hands-on approach to running the company."It brings to Barrick a good operator and free thinker inBristow," said John Ing, president of Maison Placements Canadaand a Barrick shareholder. "It is very much a bet on theindividual, the man - and what he has been able to do atRandgold."
The deal brings together two executives with differentleadership styles and backgrounds.Two-thirds of the directors of the board of the new Barrickwill be nominated by Barrick and one-third by Randgold.
"POOR HAND"
The deal value, at 48.5 pounds a share, matched Randgold'smarket capitalization as of Friday's close. The lack of apremium for Randgold shareholders prompted scepticism from someanalysts who were also concerned that Randgold's agility couldbe bogged down by the mammoth Barrick."UK shareholders are arguably being dealt a poor hand withthe merger," said Russ Mould, investment director at AJ Bell."What Bristow has got to prove now is that bigger is better andthe Randgold culture is the one that will perhaps prevail."The current spot gold price is not helping thesector, having lost out on traditional safe-haven flows to thedollar, pushing it 10 percent lower this year. Both Barrick and Randgold had lost a third of their marketcapitalisations over the past year before Monday's gains."We don't see a reason to change Randgold's approach. ... Ifwe can't deliver something that is bigger and better, then wewouldn't do it," Bristow said on a call with analysts.
Bristow said on another call that the new company would beopen to weighing options for its Nevada and Australia assets,and said there had been expressions of interest on the latter.The new company will have the sector's highest adjustedearnings before interest, tax, depreciation and appreciation,
an Ebitda margin of nearly 50 percent based on 2017 numbers, andthe lowest total cash cost position among its peers, thecompanies said.Under the terms of the deal, each Randgold shareholder willreceive 6.1280 new Barrick shares for each share of the Africanrival, the companies said. Talks on the deal, which is subject to regulatory andshareholder approvals and scheduled to close in the firstquarter of 2019, started more than three years ago with adviserstaken in July, a person familiar with the talks told Reuters.
In 2017, Barrick and Randgold combined produced 6.64 millionounces while the next largest gold miner, Newmont, churned out5.27 million ounces.The two companies said they were aligned on their strategywith Chinese investors after Barrick said it would make a biggerpush to attract investors in China. Randgold mines also in Mali, Ivory Coast and the Republic ofCongo, where it has been faced with regulatory risk, a factorthat Barrick's Africa unit Acacia Mining has to dealwith in Tanzania.M. Klein & Co and Morgan Stanley advised Barrick on thedeal, while CIBC and Barclays were the financial advisers toRandgold.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^BREAKINGVIEWS-Barrick and Randgold wisely explore M&A riches GRAPHIC-Randgold, Barrick shares vs gold price ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Justin George Varghese in Bengaluru, ZandiShabalala and Clara Denina in London; additional reporting byNoor Zainab Hussain and John Tilak; editing by EmeliaSithole-Matarise, Marguerita Choy and Leslie Adler)
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