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Under the terms of the deal, Barrick shareholders will own two-thirds of the combined firm with Randgold owning the remaining third.

We had been concerned about a lack of clear strategic direction for Barrick as its portfolio had been shrinking, its free cash flow was close to zero, and it had no CEO/president following the recent departure of Kelvin Dushnisky.

Reuters/Chris HelgrenBarrick Gold Executive Chairman John Thornton attends the company's annual shareholders meeting in Toronto, Ontario.

Thornton will keep his spot as executive chairman, while Randgold chief executive Mark Bristow will become president and chief executive officer.

Thornton, who speaks to media rarely is known to be the driving force behind all of Barrick's long-term strategies, including its investment in bringing the company's mining operations into the digital age.

"From Randgold's perspective the deal diversifies exposure away from high-risk African markets and towards Barrick's more stable North American assets".

Randgold shareholders will receive 6.1280 new Barrick shares for every Randgold share under the terms of the deal.

The latest deal is also reviving speculation Barrick may return to the negotiating table with Newmont Mining Corp. for a new tie-up after talks between the two collapsed in 2014 over differences on issues including the leadership of the combined company.

"Central to the transaction is a strategic common ground of capital discipline and a returns-focus, although only Randgold has delivered on this strategy".

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"Our industry has been criticized for its short-term focus, undisciplined growth and poor returns on invested capital", Bristow said in the statement. The company beat the analyst EPS Estimate with the difference of $-0.01.

Gold production by both companies has declined in recent years, and the acquisition of Randgold is expected to make up for Barrick's 25 percent decline in gold production since 2013. The Barrick Gold Corporation has 0.001 shares outstanding with 72.1% insider ownership. Last year, the Tanzanian government accused Acacia of US$200-billion in tax fraud.

The combined gold reserves still buried in mines- an indicator of production prospects- shrank by nearly half to 11.3 million ounces past year, from its peak in 2012 after companies cut spending on exploration and development of new projects, according to Bloomberg Intelligence data on 15 big producers. Randgold, headquartered in Britain's Channel Islands, has significant gold mines in Africa, particularly Mali.

The announcement comes at a time gold producers are under increased pressure. Moreover, it's Randgold's management team that Barrick wants. Mr Bristow is also likely to sell lower-value Barrick investments, focusing the group on high-quality assets. Barrick's president, Kelvin Dushnisky, left the company on September 1 to become CEO of AngloGold Ashanti.

"John [Thornton] has done a lot of work in cleaning up the baggage", he added.

Barrick might also benefit from Randgold's experience in navigating the tough environment in Africa.

Randgold, the smaller of the two, has seen its stock decline from more than US$103 in January to hover around US$60 earlier this month - though it was now up to US$68.42. 48,743,300 shares of the company's stock traded hands, compared to its average volume of 11,917,469.

The deal is subject to majority shareholder approval from Barrick's shareholders and 75 per cent approval from Randgold's shareholders.


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