Xstrata and Glencore agree on $90-billion all-share merger

Swiss diversified miner Xstrata and commodities giant Glencore today agreed on a $90-billion all-share merger, the largest takeover in the industry that would create a mining and trading powerhouse with sales of $209 billion.

Glencore, the world's largest diversified commodities trader, which already owns 34-per cent of Xstrata will buy the Zug, Switzerland-based miner for £39.1 billion ($62 billion) by issuing 2.8 new shares for each Xstrata share in a deal that both companies said was a ''merger of equals.''

Xstrata CEO Mick Davis, will become CEO of the combined group to be known as Glencore Xstrata International Plc, while Glencore CEO Ivan Glasenberg, will be deputy CEO and president.

The offer is a premium of about 15.2 per cent to Xstrata's 1 February share price, and Xstrata CFO Trevor Reid will become the CFO of the new company, while Glencore CFO Steven Kalmin will become his deputy.

Xstrata chairman Sir John Bond, will continue in that role in the enlarged company.

Xstrata's shareholders, other than Glencore, would hold a 45-per cent stake in Glencore Xstrata International.