Zug, Switzerland — MININGREVIEW.COM — 15 October 2009 – International mining group Xstrata Plc “’ the world’s fifth biggest diversified mining group by market value “’ has dropped its US$49 billion (R390 billion) hostile bid of rival Anglo American, in the wake of many Anglo shareholders rejected a merger of equals proposal and demanded a premium.
An Xstrata statement released here confirmed that this meant the company could not make another offer for London-based Anglo within six months unless it was an agreed bid or a third party made a proposal.
Xstrata said it believed in the strategic rationale of a merger with an Anglo merger, but was being "disciplined" and left the door open to resume its wooing of Anglo later.
“It is regrettable that the board of Anglo American immediately rejected our approach, without engaging with Xstrata,” Xstrata CEO Mick Davis said in a statement. “The compelling strategic rationale for a merger of the two companies remains undiminished.”
UK regulators issued a "put up or shut up" ruling last week, forcing Xstrata to either make a formal offer by 20 October or walk away for at least six months. “Our decision not to proceed with an offer before the deadline imposed by the UK Takeover Panel reflects our disciplined approach to growth, and our focus on the value proposition for Xstrata’s shareholders in a merger,” Davis added.
“We continue to assess a range of alternative growth options, in full recognition that transactions of this nature often take time and patience to mature,” he said.
A combination of Xstrata and Anglo American would have created the world’s biggest producer of zinc, platinum, coal for power stations and ferrochrome, and the second-biggest company in coal for steelmaking and in copper.