Colorado-based Newmont said it would buy all of Goldcorp’s outstanding common shares in a stock-for-stock transaction, acquiring each share for 0.3280 of a Newmont share, “which represents a 17% premium based on the companies’ 20-day volume weighted average share prices,” a company statement read.

The industry has been consolidating as gold mines around the world get depleted, driving up costs and encouraging companies to come together in mergers and alliances.

The merged company, to be named Newmont Goldcorp, will produce some 7.9 million ounces of gold a year.

“This combination will create the world’s leading gold business with the best assets, people, prospects and value-creation opportunities,” said Newmont Chief Executive Officer Gary Goldberg.

The merger “creates the world’s premier gold company,” added Goldcorp President and Chief Executive Officer David Garofalo.

“Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production,” he said.

The Newmont-Goldcorp deal comes three months after Barrick Gold agreed to buy Randgold Resources in a US$5.4 billion deal.