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Xstrata

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Glencore International Plc, a multinational commodity trading and mining company headquartered in a Swiss town of Baar, is not going to change terms of a of a $33 billion bid for Xstrata Plc, mining company, even though its shareholders have been pressing company’s officials to modify the offer four days before investors vote. Accordingly, a Glencore merger with Xstrata (“Glenstrata deal”) will probably not materialize unless companies are ready to reach a compromise. Main opponents to the current Glencore’s offer are Qatar Holding LLC and Xstrata’s investors. In addition, Sir John Bond, chairman of Xstrata, feels the breath of dissatisfaction on his back, if as expected the Glencore merger with Xstrata is voted down this Friday (7th of September); he might be pressured to step down from his position.

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An upcoming merger which was to take place between miner Xstrata and Switzerland-based commodities giant Glencore is now less likely due to the late demands of the Qatari sovereign wealth fund who happen to be vehemently opposing to the terms of the deal. Both conglomerates are currently listed in London. Qatar, which quietly worked its way up to second spot in the list of Xstrata’s shareholders and now, holds a collective stake of 10% in the company, placed its demands on Wednesday.

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The successful takeover of Xstrata by Glencore might turn the company into the fourth largest miner globally. It has been billed as the “merger of equals” by industry observers and insiders alike. But the merger of Glencore and Xstrata has sent shockwaves in the mining industry. Early in the year, Glencore International reported it had entered talks with Xstrata for a possible $80 billion takeover merger.

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