Xstrata acknowledges Glencore merger talks
LONDON - Reuters
The headquarters of Glencore is seen in in Baar, Switzerland, in this photo. REUTEERS PhotoMiner Xstrata is in talks with Glencore over an all-share merger of equals, it said yesterday, confirming reports of a deal that could create a combined mining and trading group worth more than 50 billion pounds ($79 billion).
The world’s largest diversified commodities trader owns a 34 percent stake in Xstrata and a tie-up between the two has long been expected. Speculation accelerated after Glencore’s $10 billion bourse listing last May. Glencore said at the time that the motivation behind going public after almost four decades as a private company was to seize acquisition opportunities.
News that Xstrata had received a concrete approach and was in discussions boosted shares in both companies, with Xstrata up 13 percent and Glencore 5.1 percent ahead in early London trade yesterday. Glencore’s Hong Kong-traded shares had gained as much as 6 percent before trading was suspended.
Xstrata said the talks “may or may not lead to an offer being made by Glencore for Xstrata. There can be no certainty that any offer will be made”.