Glencore threatens to abandon $90 billion merger with Xstrata
23 August 2012
Ivan Glasenberg, CEO of commodities trading giant Glencore International yesterday for the first time publicly said that he was willing to abandon the multibillion–dollar merger with diversified miner Xstrata rather than buckle under pressure from the Qatar sovereign wealth fund's demands for an improved offer.
Rebuffing Qatar Holding's unrealistic demands, Glasenberg, the 54-year-old South African former cricket umpire, said that the Xstrata transaction is not a "must-do deal".
Glasenberg said he can walk away without doing a deal, and come back after a few years after having developed the company through smaller acquisitions. ''If it doesn't happen now it's not the end of the world,'' Glasenberg told Reuters in an interview.
Has Glasenberg ruled the deal as already dead?, Certainly not, and he is bluffing, according to several analysts.
Baar, Switzerland-based Glencore, once one of the world's most secretive company until it went public in 2011, which holds a 35-per cent stake in Xstrata, has for the last five years wanted to merge with Xstarta.
Since the $90-billion merger was announced in February, Qatar Holding, the gas-rich gulf nation's sovereign wealth fund, has slowly been building its stake in Zug, Switzerland-based Xstrata from 2 per cent to 12 per cent at a cost of about $5 billion, becoming the miner's second-biggest shareholder after Glencore.