European regulator approves $67-bn Glencore-Xstrata deal with conditions
23 November 2012
The European anti-trust regulator, the European Commission (EC), has put modest conditions before commodities giant Glencore International for going ahead with its $67-billion merger with diversified Swiss miner Xstrata Plc.
The EC yesterday gave the green light to the deal on the condition that Glencore terminates its exclusive European zinc sales agreement with the world's top zinc producer Nyrstar, which accounts for some 350,000 tonnes of European zinc a year.
Brussels-based EC said that it had concerns that the merged entity would have the ability and incentive to raise prices for zinc metal, an important input for many EU industries.
EC's vice president in charge of competition policy Joaquín Almunia said, "The merger will bring together two major global players in key commodities.
The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanisers and car makers can continue to produce valuable consumer goods at low prices and good quality".
The EC said that its preliminary investigation found that the proposed merger would have raised competition concerns for the supply of zinc metal in Europe, as the transaction would significantly strengthen Glencore's already strong position in Europe.