The new company will keep the Barrick name and be listed in NY and Toronto, while Randgold's London listing will be cancelled.
Bristow acknowledged that the industry has always been criticised for its "short-term focus, undisciplined growth and poor returns". Randgold's London listing will be cancelled.
As part of the deal, China's Shandong Gold, one of the country's biggest gold producers, has agreed to buy $300 million of shares in Barrick. John L. Thornton, executive chairman of Barrick, will become executive chairman of the new Barrick Group; Mark Bristow, CEO of Randgold, will become CEO of the new Barrick Group.
Speculation of a tie-up between the two companies comes as this year's Denver Gold Group conference, is about to kick into gear.
The deal brings to together two executives with different leadership styles and backgrounds.
Monday's news sent Randgold's share price soaring 5.79 percent to 5,208 pence in late morning deals on London's falling FTSE 100 index. This lack of a premium for Randgold shareholders prompted scepticism from some analysts who were also concerned that Randgold's agility could be bogged down by the mammoth Barrick.
"Mr Bristow has struck gold, in a sense, as he now becomes the boss of the world's biggest gold miner", said AJ Bell investment director Russ Mould.More news: Trump on Brett Kavanaugh: "I am with him all the way"
More news: Real Madrid player ratings vs Espanyol- Defensive mids win the game
More news: Oil traders say $100 coming as OPEC struggles to fill Iran gap
"What Bristow has got to prove now is that bigger is better and the Randgold culture is the one that will perhaps prevail".
"We don't see a reason to change Randgold's approach". The company shed non-core assets outright, or sold stakes to partners, to fix its balance sheet, after its debt peaked at $15.8 billion in 2013.
The creation of a gold mining company with a combined market value of about $18 billion helps Barrick to boost output at a time when its stock has been punished for the producer's stagnant pipeline, according to Bloomberg.
Randgold shareholders will receive 6.1280 new Barrick shares for every Randgold share under the terms of the deal.
Talks on the deal, which is still subject to regulatory and shareholder approvals and scheduled to close in the first quarter of 2019, started more than three years ago with advisors taken in July, a person familiar with the talks told Reuters.
Barrick and Shandong Gold tied up for the first time past year, creating a 50-50 joint venture at the Veladero mine in Argentina.
Barrick shareholders will end up own two-thirds of the combined firm and Randgold will own the remaining third.
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.