'Glenstrata' merger review process still ongoing

Xstrata has said that the merger review process relating to its controversial tie-up with commodities giant Glencore is still ongoing in the European Union.

"Xstrata understands that Glencore now anticipates that it will file formal notification of the merger with the European Commission in September," the mining firm said.

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Potential risks to the merger have increased in recent weeks as speculation mounts about growing opposition from Xstrata shareholders who are expected to vote on whether or not to block the deal next month.

The main sticking point is the exchange ratio of 2.8 Glencore shares per Xstrata share, which some shareholders such as Qatar Holdings want to see raised to 3.2 before the vote the merger through.

However, Glencore's Chief Executive Ivan Glasenberg announced last week that the company would not bump up its offer and that the merger is "not a must-do deal".

Shares in Glencore declined on Wednesday after it was reported the Xstrata shareholder Norges Bank Investment Management had raised its stake in the miner in the last few weeks, fuelling concerns that the Norwegian fund could join forces with the Qataris to vote to block the merger.

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