Swiss giants Xstrata, Glencore in talks for $80-billion "merger of equals"
02 February 2012
Swiss diversified miner Xstrata today said that it is in talks with commodities giant Glencore for an all-share merger of equals, a deal that could create a company worth more than $80 billion and with revenues of around $175 billion.
Glencore, the world's largest diversified commodities trader already owns a 34-per cent stake in Xstrata and a potential merger between the two Swiss giants would become the biggest takeover to date in the industry.
Xstrata said in a statement early today that it has been approached by Glencore about "an all share merger of equals." It indicated that no offer has been made.
Xstrata however cautioned there was no certainty that any offer would be made, but under the new UK takeover rules, Glencore has until 1 March to make an offer.
Xstrata has a market value of £33.2-billion ($52.6 billion), while Glencore's is around £29.9 billion ($46.53 billion), and after excluding the 34.5 per cent stake that Glencore already owns in Xstrata, the combined company could be worth more than $80 billion
As soon as Xstrata announced the potential merger early today, the miner's stock rose by 10 per cent to £12.31, while Glencore's rose by 5 per cent to £4.53, taking the market capitilisation of a combined company ahead of Anglo-Australian miner Rio Tinto.
Based in Baar, Switzerland, Glencore is one of the world's largest suppliers of a wide range of commodities and raw materials to industrial consumers.