EU gives Glencore-Xstrata merger thumbs up

The European Commission has cleared the merger between commodities giant Glencore and mining behemoth Xstrata.

The European Commission has cleared the merger between commodities giant Glencore and mining behemoth Xstrata.

However, the blessing for the $31bn deal comes with the caveat that Glencore must terminate an exclusive deal it has with Nyrstar, the world's largest zinc metal producer.

Glencore must also sell its 7.8% stake in that firm to satisfy European concerns that the merged entity would have the ability and incentive to raise zinc metal prices, hitting European industries.

The two companies still require regulatory approvals in both China and South Africa.

Joaquin Almunia, the Commission's vice-president in charge of competition policy, said the merger would bring together two major global players in key commodities.

"The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanisers and car makers can continue to produce valuable consumer goods at low prices and good quality," he said.

In September, after months of negotiations, Glencore won over shareholders with its offer of 3.05 shares for each Xstrata share.

Xstrata is the world's fifth largest metals and mining group, while Glencore is the world's leading commodities trader.

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
2 Feb 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

Best savings accounts – February 2023
Savings

Best savings accounts – February 2023

Interest rates on cash savings are making a comeback. We look at the best savings accounts on the market now
3 Feb 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

Interest rates are now at 4%, and they could rise further in the months ahead.
3 Feb 2023
NS&I brings back one-year fixed bonds with highest rates since 2010
Personal finance

NS&I brings back one-year fixed bonds with highest rates since 2010

NS&I’s one-year fixed bonds are back on sale after being pulled off the market in 2019 - but is the rate any good?
1 Feb 2023