Barrick Gold agrees to buy rival for $10.4b

NEW YORK -- Toronto-based Barrick Gold Corp., the world's number three gold company, agreed on friendly terms to acquire Placer Dome Inc. and create the world's largest gold producer after raising its offer for the Vancouver gold firm to $10.4 billion. That deal prompted Vancouver-based gold producer Goldcorp Inc. to buy certain mining assets from Barrick for just under $1.49 billion in cash.

In trading on the New York Stock Exchange, Goldcorp shares rose 94 cents to close at $20.72; shares of Placer Dome fell 31 cents to $22.34; and shares of Barrick fell 10 cents to close at $27.12.

The new $10.4 billion offer replaces Barrick's last offer of about $9.4 billion that had been rejected by the board of Placer Dome, the world's sixth-largest gold mining company. Under the agreed-to terms, Placer shareholders will get either $22.50 in cash or 0.8269 of a Barrick common share plus 5 cents cash per share. Barrick, Canada's biggest gold miner, has limited its cash for the offer at $1.34 billion and shares to be issued at 333 million.

Placer's board unanimously backed the new offer.

''We are very excited about the coming together of two great gold mining companies. We can now move forward and deliver -- together -- from our assets, people and projects," said Barrick president and chief executive Greg Wilkins. ''Together, Barrick and Placer Dome employees have an unparalleled opportunity to achieve the vision of becoming the best gold mining company in the world."

Mining companies have been acquiring rivals as gold prices rose to a 24-year high and output declined in South Africa, Australia, Canada, and the United States.

Under the $1.49 billion transaction, Goldcorp will get Placer's stake in the Campbell mine, the Porcupine joint venture, and the Musselwhite joint venture in Ontario. The company will also receive a 50 percent interest in the La Coipa mine in Chile, and a 40 percent interest in the Pueblo Viego development project in the Dominican Republic.