The era of the mega-merger is over

As shown by the mess resulting from the failed wranglings between Glencore and Xstrata, globalisation has consigned the mega-merger to history. Matthew Lynn explains why that's no bad thing.

There was a time when the huge mergers and acquisitions (M&A) deal was the pinnacle of City work. It was where the big fees were earned, and where the brightest minds in the industry concentrated their energies. When any big deal was announced a well-oiled machine clicked into action, with armies of advisers, PR men and brokers ensuring a multi-billion-pound combination was put together with as little trouble as possible. Not any more. The mega-merger has turned into the mega-shambles.

For the past six months mining giants Glencore and Xstrata have been trying to combine their two businesses. The deal was first formally tabled in February as a merger of equals'. Last week, the super-smooth Tony Blair was even called in to try and smooth the process. But even the man who managed to keep Gordon Brown at bay for a decade couldn't calm the skyscraper-sized egos involved in this deal for more than a few days.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.