Report Tools

Glencore & Xtsrata: Creating the fourth largest global mining company

Published: January 2013 · Publisher: MarketLine
Glencore International, a commodity trading giant, is seeking to merge with mining company Xstrata. The move was announced in February 2012 with the proposal accepted by shareholders in November 2012. The deal is worth $31bn and would create
Report Type Case Studies
Language English
Format Electronic (PDF)
Pages23
Frequency Updated Annually
Availability Will be emailed within 1 business day
Reference No. 0109-2764
Price € 369,00
Options
  • Description
  • Table of Contents
  • Ask a Question
Introduction

Glencore International, a commodity trading giant, is seeking to merge with mining company Xstrata. The move was announced in February 2012 with the proposal accepted by shareholders in November 2012. The deal is worth $31bn and would create the fourth largest mining company in the world. The company would also possess leading positions in power generation and agricultural products.

Features and benefits

* The publisher's Case Studies describe topics such as innovative products, business models, and significant company acquisitions.
* Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.”

Highlights

Glencore operates in commodity markets, including mining. The company engages in industrial activity and marketing. Xstrata is a mining company which profited from Glencore spinning off its thermal coal assets, and has grown to incorporate many metals The company has focused on organic growth projects, productivity and efficiency.
Glencore has maintained an interest in Xstrata. The deal would create the fourth largest mining company with a dominant position in many commodities and vertical integration. Glencore will utilize Xstrata’s cost cutting abilities. Xstrata would also gain access to Glencore’s extensive network of traders and local offices.making decisions.
The deal has ramifications beyond the mining industry. Glencore CEO Ivan Glasenberg will now be in charge of Xstrata, with the senior management team likely to depart or be seriously depleted. The deal is still subject to approval from competitive authorities, which could force concessions from the authorities to ensure the deal goes through.

Your key questions answered

* Who are Glencore International and Xstrata?
* Why do Glencore and Xstrata want to merge?
* What are the potential consequences of the merger?
Copyright © FriedlNet. You may share using our tools Please don't cut content from FriedlNet and redistribute by email or post to the web.
O VERVIEW
Catalyst
Summary
GLENCORE AND XSTRATA: VALUE CREATORS
Glencore’s success in growth
Marketing and Industrial sectors
Diverse product base helps to mitigate downturns
Acquisitions helped the company’s growth
The strength of Glencore’s IPO
Xstrata
Strong acquisition and investment drive helped to fuel growth
Emphasis on cost reductions
Xstrata’s devolution of authority
Organic growth plans to complement M&A expansion
WHY GLENCORE AND XSTRATA WANT TO MERGE
A merger of equals
Glencore and Xstrata’s relationship
Glencore-Xstrata’s potential
Metals and minerals
New moves into fuel
Advantages for Glencore
Advantages for Xstrata
CONSEQUENCES OF THE MERGER
Is the deal a merger of equals or takeover?
Qatar Holdings
Rejection of “Golden Handcuffs”
Assimilation problems
Growth plans
Management styles
The deal may require concessions to regulators
The purchase of Viterra resulted in regulator intervention
The European Commission
South African snags
Accusations of unethical practices
CONCLUSIONS
Glencore Xstrata: a recipe for success
APPENDIX
Definitions
Sources
Further Reading
Ask the analyst
About the publisher
Disclaimer
Copyright © FriedlNet. You may share using our tools Please don't cut content from FriedlNet and redistribute by email or post to the web.