HomeBase MetalsSupport for Xstrata's Anglo merger bid

Support for Xstrata’s Anglo merger bid

Mick Davis,
CEO, Xstrata
London, England — MININGREVIEW.COM — 05 August 2009 – Swiss-based Xstrata – the fifth largest diversified metals and mining company in the world – says its largest shareholder, Glencore International AG, supports the mining company’s US$44 billion (R350 billion) proposal to merge with Anglo American Plc.
“They are very supportive of the transaction,” Xstrata CEO Mick Davis said here in a telephone interview with Bloomberg News.

Glencore “’ the world’s biggest commodities trader “’ owns 34% of Xstrata, according to data compiled by Bloomberg, and helps to sell the company’s coal and some of its metals.

Xstrata is seeking a “merger of equals” that would combine mines in Canada, Australia and South Africa with nearby sites operated by Anglo. It says the transaction would add US$1 billion (R8 billion) a year to the enlarged company’s pre-tax earnings by the third year following the deal. London-based Anglo rejected the bid in June and has pledged to cut US$2 billion (R16 billion) of costs by 2011.

“There has been a lot of interest in the deal from the mining industry and investors,” Davis said. “We can be entirely patient about how this deal evolves.”

Anglo CEO Cynthia Carroll said last week the approach was a distraction. “Anglo continues to talk about the bid, therefore it is certainly a proposal that they are busy thinking about,” Davis added.