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Xstrata and Glencore in talks over 'merger of equals' | |
(about 1 hour later) | |
Mining giant Xstrata and commodities trader Glencore International have announced they are in talks over a possible merger. | Mining giant Xstrata and commodities trader Glencore International have announced they are in talks over a possible merger. |
Xstrata shares jumped 11% as it said it had been approached by Glencore regarding a "merger of equals". | |
Glencore shares rose 3.6% in London. The company has annual revenues of about $90bn (£56bn). | |
Earlier reports had suggested that a merger between the two would create a firm with a combined value of $80bn. | |
However, Xstrata - which has annual revenues of about $30bn - said in a statement that there was no certainty that any offer would be made. | |
Glencore now has until 1 March to make a formal offer under UK takeover rules. | |
BBC business editor Robert Peston summed up the deal as: "One trades, one digs, often in poorer countries." | |
Trading giant | |
The Financial Times reported that a deal could be announced as soon as next week, before Xstrata's annual results on Tuesday. | |
Glencore raised about £6.8bn in May last year when it floated its shares in London and Hong Kong. | Glencore raised about £6.8bn in May last year when it floated its shares in London and Hong Kong. |
The listing was London's largest initial public offering. | |
Glencore is the world's largest commodities trader, employing about 57,500 people across more than 40 countries. It made a profit of $3.3bn last year. | |
It trades metals and minerals, as well as energy and agricultural products, and has benefited from the recent growth in demand for commodities, especially from China. |