Monday, 23rd January 2006 (3482 views)

A merger to form the world's largest gold company has been completed in Canada.

Barrick Gold announced on Friday that it had obtained 81 per cent of Placer Dome's stock, 358 million common shares, after gaining approval for its US$10.4 million offer in December.

Shareholders in Placer Dome can still take up Barrick Gold's offer, with the deadline now pushed back to February 3rd. The company is exchanging 0.83 Barrick Gold stock for Placer Dome shares, and is also offering $22.50 in cash.

"We are pleased that Placer Dome shareholders have accepted our offer, and we welcome them as Barrick shareholders," said Barrick chief executive and president Greg Wilkins.

"We look forward to working with Placer Dome's talented employees and, with them, commencing the process of integrating these two great companies. The combined company will have the size, scale and financial strength to capitalize on industry opportunities and deliver value from its assets, people and projects."

But despite the merger, analysts believe that more consolidation has yet to take place within the gold mining industry.

Desjardins Securities' Michael Fowler told the Canadian Press that it was likely that a another "round of consolidations" would take place, as well as "a whole bunch of consolidations in the mid-tier. And the fallout of any assets Barrick doesn't want."

 

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