Merger to have sequels
John Feary, 8th Feb 2012
ZUG, Feb 8 – The “merger of equals” that will create the US$90B Glencore Xstrata International is likely to set the direction for big business seeking to cope with the major changes taking place in global commodity markets.
The union of Xstrata and Glencore International will be the world’s fourth largest diversified natural resource company, third largest copper producer (the largest within four years), fourth largest nickel producer, global leader in export thermal coal, ferrochrome and integrated zinc production with 101 mines and operations in 33 countries.
The unique business model is fully integrated along the commodities value chain from mining and processing, storage, freight and logistics to marketing and sales.
Within the merged company, Xstrata's operating businesses will continue to operate under their existing brands and Glencore's marketing functions will also retain their independent image.
Operating assets currently held by Glencore will be integrated with Xstrata business units and marketing functions within Xstrata will be managed by the existing Glencore management teams
The merger, to be achieved by the issue of 2.8 Glencore shares for every Xstrata share held, is due to take effect in the third quarter of 2012.
The combined company will be headquartered in Switzerland and listed on the London and Hong Kong exchanges.
The much debated clash of egos between current bosses Ivan Glazenburg at Glencore and Mick Davis at Xstrata has been resolved with Davis named CEO of the combined company, Glazenburg deputy CEO and president.
Also in the February 1 - 7, 2012 edition
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