Barrick Gold makes $18bn unsolicited bid for rival Newmont

Canada’s Barrick Gold made a hostile $18bn bid on Monday to buy US rival Newmont Mining and merge two of the largest gold firms in the world.

Newmont responded saying it would consider a tie-up with Barrick but that its own $10bn purchase of Goldcorp, which was pending, was a better option. Chief Executive Gary Goldberg pointed to a joint-venture as a better way of extracting value from the two companies' mines in Nevada.

In a statement, Newmont also said that it had previously determined that Barrick’s risk and return profile is inferior to its own in several regards, such as its ineffective operating model, poor track record on delivering shareholder returns and unfavourable jurisdictional risk.

Barrick CEO Mark Bristow retorted, saying the merger would unlock more than $7bn-worth of real synergies in net present value.

“The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of Tier One gold assets,” Bristow said.

“Most important, it will enable us to consider our Nevada assets as one complex,” he added.

Shares of Barrick and Newmont fell 1% in Wall Street on Monday.