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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
8 of the best converted properties for sale now
The best converted properties for sale – from an apartment in the former Hartley’s Jam factory on London’s Southbank, to a converted 18th-century mill in Itteringham, Norfolk
-
How taking a two-year career break could leave a £26k hole in your pension
Career breaks are increasingly common but it is important to take steps to protect your pension, as gaps compound over time