London, England — MININGREVIEW.COM — 25 May 2009 – Global mining and natural resources giant Anglo American plc – one of the world’s largest mining companies – may be vulnerable to a potential takeover from Swiss-based rival Xstrata – the fifth largest diversified metals and mining company in the world.
Reuters reports that a research note from financial services group Nomura said Anglo had ditched its previous conservative strategy, but the fruits of a new high-growth approach would not be seen for around two to three years since it had postponed three flagship projects.
“Anglo may be facing an identity crisis that could leave the company vulnerable to takeover,” said analyst Paul Cliff. “While BHP/Rio and Vale/Xstrata have attracted most of the merger and acquisition headlines in the sector recently, we would not rule out an Xstrata all-share offer or merger of equals with Anglo over the next 12 months.”
Reuters quotes Cliff as saying that, assuming a 30% takeover premium, a deal would be accretive to Xstrata in terms of earnings per share by 10% in 2010 and 13% in 2011.
Anglo and Xstrata are the world’s fourth and fifth biggest diversified mining groups by market value at US$33 billion (R297 billion) and US$29.7 billion (R267 billion) respectively.