Barrick Gold's (GOLD 3.39%) and Newmont Mining's (NEM 12.46%) merger talks have ended—again. As focus turns to why the talks broke down, there's some speculation that Barrick may attempt a hostile takeover. Barrick shareholders should not only be relieved that the potential deal fell through, but they should really be concerned about any sincere takeover efforts.

Barrick recognizes 'big' isn't a strategy
Barrick has a reputation for its aggressive growth strategies, some which are extremely risky. Take its massive Pascua-Lama project located along the borders of Chile and Argentina. It was a megadream turned megamess that's now been suspended.

Investors have lashed out at mining companies who acted like getting bigger was a prudent strategy. Barrick executives responded by assuring shareholders they've learned lessons. They portray a company that's wiser, more focused on efficiency, and recognizes the need to slim down.

Last year Barrick whittled down debt, divested numerous high-cost, non-core assets and closed the Pierina mine. Ending 2013 with all-in-sustaining-costs (AISC) of $913 an ounce, Barrick appeared to be practicing what it preached.

Or, at least it seemed until news of the merger talks with Newmont, a company whose 2013 AISC was $1,104. This raises the question -- is Barrick addicted to bigness?

Peter Munk, Barrick's founder and chairman, touted the merger as a great value to shareholders and made it seem as if shareholders were pressing Barrick to pursue the deal. But why would they? Why now?

A billion reasons to merge, really?
If Barrick and Newmont merged, the companies claimed they could save over $1 billion a year in Nevada, where they both have operations representing slightly over a third of their total production. Some analysts' were skeptical about that calculation, and rightfully so.

Barrick's operations are already low-cost relative to peers, including Newmont. Barrick's 2014 forecast projected 60% of its production will come from five mines in the Americas with $700-800 AISC. When the company set out to clean up its balance sheet last year, the strategy was to address any mine with costs over $1,000.

Newmont's forecast projects over 50% of its production will also come from the Americas this year. The projected AISC ranges from $1,045 to $1,205.

Binge and purge?
In addition to having to tackle Newmont's higher costs, Barrick would assume potential liabilities, such as Newmont's delayed Conga Project in Peru—its fate also unknown. Barrick already has assets it wants to offload and Newmont would bring more undesirables. The companies planned to spin off the undesirables into a new company.

According to reports, that involved Barrick's shareholders parting ways with their current CEO, Jamie Sokalsky, who would take the reigns of the spinoff company. Newmont's CEO, Gary Goldberg, was to run the main unit.

In the end, Munk claims this megadeal would lead to a leaner, more efficient company. Without Newmont, Barrick plans to produce 6 million to 6.5 million ounces this year. If combined, Munk claimed the two companies, which currently produce over 13 million ounces, would scale that back to 6.5 million to 7 million ounces.

"Not only don't we get bigger, we both get smaller. But we get much, much more profitable," Munk told Bloomberg.

Was it really in Barrick's shareholders best interest to pay a 13% premium under these circumstances? Or was it Barrick set to relapse to old habits?

The end of an era?
The merger efforts smelled suspiciously like Barrick wanting to make big news with a bid deal. Munk has said his ultimate goal is to be the biggest.

Barrick was aiming for an agreement before the shareholders meeting on April 30, when Munk is set to retire. Had they inked the deal, the founder of the world's largest gold mining company would mark his exit with the largest gold mining deal in history. What better storyline could Munk have wished for?

But after the grand headlines, Barrick's investors would have been left with what could have been another megamess of a deal. This is one of multiple merger efforts that have failed, a fact that should not be ignored. Barrick's investors should be relieved and should hope that Munk's departure ends an era of Barrick's addiction to bigness.