What's going on?

On Monday, Canadian gold miner Barrick Gold agreed to buy Africa-focused rival Randgold Resources in a shimmering deal worth $18.3 billion.

What does this mean?

The deal is a share-for-share merger, meaning that Randgold�s stockholders will be receiving Barrick shares � just over six of them for each of their Randgold shares � and not cash. After the deal�s completion, Barrick shareholders will own 66% of the new, combined company and Randgold shareholders will own the rest. The new company will be the world�s biggest gold miner, producing more than six million ounces of gold per year.

Why should I care?

The bigger picture: Gold�s out of favor, for now.

Barrick and Randgold are hoping that combining their powers will help them weather the storm that�s clouding the gold mining industry. The price of gold has fallen 9% this year so far and production of the precious metal is falling, too (Barrick alone was mining nearly eight million ounces per year a decade ago). Gold�s price typically rises when the value of the US dollar falls (some people turn to gold as a store of value when the value of paper currency is slipping � plus the price of gold is denoted in dollars, so gold might look a bargain to international buyers when the dollar�s down). With the dollar on a tear this year, gold isn�t looking so shiny. However, inflation (i.e. the price of goods and services) is also on the up. With the dollar being effectively worth less every day as a result, people often turn to gold for the same reason � to store value � which gives it hope yet.

For markets: Turning over a new (gold) leaf?

Investors have criticized gold miners in recent times for managing their money poorly. Barrick�s and Randgold�s stocks have both lost a third of their value over the past year. But investors seemed to approve of the deal: Barrick�s stock rose 6% and Randgold�s 5%.