Mining giants Barrick Gold and Randgold Resources have agreed to a merger to form what they describe as an “industry-leading gold company” known as the New Barrick Group, which will have a market capitalisation of $18.3bn.

The merger, which will close by the first quarter of 2019, will result in Barrick shareholders owning approximately two-thirds of the new company, while Randgold shareholders will own the remaining third.

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Under the terms of the agreement, all of Randgold’s issued shares will be acquired by Barrick, and each Randgold shareholder will receive 6.1280 New Barrick Group shares for each Randgold share previously owned. Randgold shareholders will also be entitled to a dividend of $2 per share for the 2018 financial year, while Barrick shareholders will have access to a dividend of $0.14 per share over the same period.

“The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world’s largest collection of tier one gold assets,” said Barrick executive chairman John L Thornton.

“Our overriding measure of success will be the returns we generate and not the number of ounces we produce, balancing boldness and prudence to deliver consistent and growing returns to our fellow owners, a truly simple but radical and achievable concept,” he continued.

The partners estimate the New Barrick Group will generate revenue of $9.7bn and an adjusted EBITDA of around $4.6bn, resulting in the largest annual revenues of any gold miner in the world, ahead of Newmont and AngloGold, which posted revenues of $7.11bn and $4.09bn respectively in 2016. The New Barrick Group will also be the world’s leading producer of gold, with shareholders estimating gold production to reach 6.5 million ounces in 2018, compared with Newmont’s 4.9 million in 2016.

The new company’s business strategy will also ensure operations are optimised and sustainable, alongside meeting the projected figures. The new corporate hierarchy aims to be decentralised and streamlined and will work towards “zero harm workplaces” in the mining industry.

The merger follows a year in which the share price of both Barrick and Randgold has fallen, by 25% and 34% respectively, and the price of gold has fallen 9% to $1,206 per troy ounce. Both companies are optimistic that their new company will address the industry’s struggles.

“Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital,” said Randgold CEO Mark Bristow.

“The merged company will be very different.

“It’s goal will be to deliver sector-leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business and be prepared to make tough decisions.”