Newmont Mining Corp. (NEM - Get Report) said Monday that it's agreed to an all-share takeover of Goldcorp Inc.  (GG) that values its Canadian rival at around $10 billion.

Newmont said it will pay Goldcorp investors 0.328 of Nemont shares for each outstanding Goldcorp share, a ratio that translates to a 17% premium to the 20-day volume weighted average of each of the company's stock. With the inclusion of debt, the enterprise value of the deal is pegged at around $12.5 billion, with Newmont holding around 65% of the combined entity.

"This combination will create the world's leading gold business with the best assets, people, prospects and value-creation opportunities," said Newmont CEO Gary Goldberg. "We have a proven strategy and disciplined implementation plan to realize the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces over a decades-long time horizon, the sector's largest gold Reserve and Resource base, and a leading project and exploration pipeline."

Goldcorp shares closed higher by 7.1% to $10.38 in trading on Monday, while Newmont slumped 8.9% to $31.78.

Newmont Mining CEO Goldberg will stay on with the group until the deal with Goldcorp is closed, which the companies hope will happen in the second quarter of this year, but will then retire from the company and make way for current Newmont President and chief operating officer Tom Palmer to server as CEO of the combined group.

Spot gold prices have risen more than 10.2% since mid-August, outpacing the broader decline in the U.S. dollar index, a benchmark of the greenback against a baskets of six global currencies, which has fallen around 1% over the same period. 

Newmont and Goldcorp mined a collective total of 7.9 million ounces of gold last year, the companies said, and will control 75% of proven gold reserves in North and South America, a figure that could trigger scrutiny from anti-trust authorities in either Canada or the Untied States.