Canada’s Barrick Gold Corporation (NYSE: ABX) has agreed to buy Randgold Resources Ltd. (NASDAQ: GOLD) for an estimated USD 5.4 Billion.
This purchase is the biggest gold deal of the last three years, but this deal doesn’t come without its own share of problems. Both Company’s stocks have either been stagnant or in decline since February 2017. With the purchase in place, both would hope for growth once it is finalized.
With discontent growing from shareholders, both sides hope this deal is answer to their problems according Kieron Hodgson, a natural resources analyst at Panmure Gordon. Barrick shares have risen 5.7% since the deal has been agreed to and Randgold shares have fallen 30% over the past year.
Along with the 30% drop in share value, Randgold is dealing with a USD 190 Billion tax bill from Tanzania and labor issues in the Ivory Coast. This acquisition could help to alleviate Rangolds problems with the resources and structure that Barrick could provide.
The board of investors votes on November 4th, so there is still time for a twist, but this deal looks like a forgone conclusion.