Shareholders of Swiss miner Xstrata Plc yesterday approved the $67-billion merger with its largest shareholder and commodities giant Glencore International, but vetoed a controversial retention bonuses for its top level executives.
The nod for the merger came a few hours after shareholders of Baar, Switzerland-based Glencore had approved the long-awaited merger. (See: Glencore shareholders approve $67-bn merger with Xstrata)
Investors in Xstrata were expected to back the deal in an unusual two-part vote at meetings in Switzerland and the UK. The first resolution was to approve the merger with a £144-million retention bonuses for about 70 Xstrata top level executives and the second is to back the acquisition without the incentive proposal.
Shareholders voted 67.9 per cent in favour of a first resolution, which included the retention bonuses, falling short of the required 75 per cent, while they voted by 78.9 per cent for the second resolution, which favoured the merger without the board-recommended payments package to retain top officials.
Acknowledging defeat, John Bond, chairman of Xstrata, who was due to become chairman of the combined company, said that post merger he would step down. In his resignation letter, Bond cited shareholders' decision "not to support the board's recommendation" to approve the payments.
The vote finally brought an end to years of on and off merger talks between the two companies and nine months of hard negotiations with Qatar Holding, Xstrata's second-largest shareholder after Glencore, which demanded a better offer.