Barrick Gold Corp. proposed a merger with Newmont Mining Corp. based on an unsolicited, all-share deal. The offer values Newmont at $17.85 billion and would combine the world’s two largest gold mining companies. Barrick argues that the merger will allow the company to trim costs while combined assets, especially in Nevada, will open up additional value. Barrick’s proposal follows a recent, $6 billion all-stock acquisition deal with Randgold Resources, an African-focused mining company.

Newmont has expressed skepticism of Barrick’s proposal, citing a discounted stock value, which it believes is not justified in light of Newmont’s recent returns. Furthermore, Newmont is currently seeking to complete its own $10 billion acquisition of Goldcorp Inc., a Canadian mining company. Newmont’s current proposal would pay a 17% premium on Goldcorp shares.
Barrick’s recent efforts aim to address relatively stagnant gold prices over the last few years, with futures ranging between $1,000 and $1,400 per ounce. The price of gold has closed over the key $1,300 mark as recently as last month.

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