"Our industry has been criticized for its short-term focus, undisciplined growth and poor returns on invested capital".
The enlarged company, keeping the Barrick name, will be traded in NY and Toronto.
The merger will also bring together two of the biggest names in the global gold sector: John Thornton, former president of Goldman Sachs who's been at the helm of Barrick since 2014, and Mark Bristow, an outspoken South African geologist who founded Randgold in 1995, growing it into a $4.8-billion company and the UK's top gold producer.
Randgold holders will own a third of the combined company even though Randgold's gold production previous year of 1.3 million ounces was a fraction of Barrick's 5.3 million.
Andy Lloyd, a spokesman for Barrick, and Kathy du Plessis from Randgold Resources declined to comment, said the newswire service.
But Barrick shareholders are also hoping that Randgold, which has proven itself to be a skilled operator in politically hard jurisdictions in Africa, can help Barrick end an impasse that has resulted in the idling of a big chunk of its African gold production.
Unusually for a large takeover deal, Barrick is not paying a premium for Randgold, instead paying the market price.
The massive merger comes during a tough year for the gold industry.
Randgold, the smaller of the two, has seen its stock decline from more than US$103 in January to hover around US$60 earlier this month - though it was now up to US$68.42. "If we can't deliver something that is bigger and better, then we wouldn't do it", Bristow said on a call with analysts.
New Barrick is valued at 5.1 times 2017 Ebitda, against an average of 8.8 times for the other four miners.
The new company will have the sector's highest adjusted earnings before interest, tax, depreciation and appreciation and EBITDA margin of almost 50 percent based on 2017 numbers, and the lowest total cash cost position among its peers, the companies said. Its subsidiary Acacia Mining PLC., which operates three gold mines in Tanzania and accounts for about 6 per cent of Barrick's annual production, has been under a gold-export ban in the country for more than a year.
Randgold's shareholders will own 33.4 percent of the combined firm, with the rest controlled by Barrick's investors.
The two companies said they were aligned on their strategy with Chinese investors after Barrick said it would make a bigger push to attract investors in China.
The deal will also give Barrick a much bigger presence in Africa, where Randgold has mines in Mali, Senegal, Côte d'Ivoire and the Democratic Republic of Congo.
M. Klein & Co and Morgan Stanley advised Barrick on the deal, while CIBC and Barclays were the financial advisers to Randgold.