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Glencore merger with Xstrata announcement expected imminently

Published:  1 Oct at 9 AM

It is expected that today will see Xstrata board members tell the mining company’s share holders that they should agree to a merger with Glencore, the commodities trader. The UK Takeover Panel has set today as the deadline for a decision.

Glencore first announced its interest in a tie-up in May this year, but a disagreement over share prices has dragged on with Qatar Holding, one of Xstrata’s largest shareholders, demanding that terms were improved. Glencore has since upped its offer from 2.8 Glencore shares for each Xstrata share to 3.25 shares.

If the deal is allowed to go ahead, the merger will create the world’s largest zinc producer and the biggest exporter of coal for use in power plants on the planet. Xstrata mines nickel, copper and coal in Central Asia, America and Africa.

The company’s profit growth was driven by coal last year and around half of the firm’s revenue came from copper production. Although Glencore does not actively mine minerals out of the ground, it trades in fuels, crops and metals and also has interests in mining firms.

Both countries are listed on the stock exchange in London. Glencore is Swiss and Xstrata is Anglo-Swiss. In 2011 Xstrata declared profits of $5.78 billion and Glencore made $4.07 billion.