'Glenstrata' merger notified to European Commission
As Glencore and Xstrata wait for regulatory approval on their merger, the miners have assured that they do not expect the combining of the businesses to have a negative impact on competition in the commodity markets in which the two operate.
As Glencore and Xstrata wait for regulatory approval on their merger, the miners have assured that they do not expect the combining of the businesses to have a negative impact on competition in the commodity markets in which the two operate.
After constructive consultation with the European Commission (EC), the merger will now be notified to the EC under the European Union merger regulation, Glencore announced this morning.
"Each of Glencore and Xstrata are familiar with the Commission's merger control process and together look forward to working with the Commission in a process which avoids the need for multiple filings with national Member State authorities," the company said.
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Terms of the merger announced on February 7th shows that Xstrata shareholders will be offered 2.8 Glencore shares for every Xstrata held. The merger values each Xstrata share at 1,290.1p and the entire issued share capital of Xstrata at around £9.1bn. Though the fact that Glencore has a 34% stake in Xstrata means that the prospect of a merger has been on the cards for some time, the offer terms still represent a premium to Xstrata's share price of 1,119.50p on February 1st, the last trading day before the official announcement of merger talks.
Glencore said today that the merged firm is expected to be able to "offer customers a wider range of products and services and provide improved security of supply to satisfy customer demand."
BC
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