This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-16850140
The article has changed 8 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| Xstrata and Glencore in talks over 'merger of equals' | Xstrata and Glencore in talks over 'merger of equals' |
| (about 2 hours 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 10% as it said it had been approached by Glencore regarding a "merger of equals". | Xstrata shares jumped 10% as it said it had been approached by Glencore regarding a "merger of equals". |
| Glencore shares rose 5.4% in London. The company has annual revenues of about $90bn (£56bn). | Glencore shares rose 5.4% 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. | 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. | 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. | 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." | BBC business editor Robert Peston summed up the deal as: "One trades, one digs, often in poorer countries." |
| Trading giant | Trading giant |
| Charles Cooper, an analyst at Oriel Securities, noted that Glencore would have to offer a "pretty significant" premium for the deal to go through. | Charles Cooper, an analyst at Oriel Securities, noted that Glencore would have to offer a "pretty significant" premium for the deal to go through. |
| This is because Xstrata currently has a bigger market valuation than Glencore, because Xstrata makes its profits from its lucrative mining operations rather than trading commodities. | This is because Xstrata currently has a bigger market valuation than Glencore, because Xstrata makes its profits from its lucrative mining operations rather than trading commodities. |
| Xstrata is currently worth about £36.5bn, whereas Glencore is worth £31.5bn. | Xstrata is currently worth about £36.5bn, whereas Glencore is worth £31.5bn. |
| "If the deal happens, Glencore would go from making its money primarily from its trading arm to a copper/coal company," he told the BBC. "That would be broadly positive for Glencore's shareholders." | "If the deal happens, Glencore would go from making its money primarily from its trading arm to a copper/coal company," he told the BBC. "That would be broadly positive for Glencore's shareholders." |
| The histories of both firms are intertwined. | The histories of both firms are intertwined. |
| Glencore already has a 34% stake in Xstrata, which was formed in 2002 when it bought Glencore's coal assets. | Glencore already has a 34% stake in Xstrata, which was formed in 2002 when it bought Glencore's coal assets. |
| Xstrata mines copper in South America, zinc in Spain, and ferrochrome and vanadium in Australia and South Africa. | Xstrata mines copper in South America, zinc in Spain, and ferrochrome and vanadium in Australia and South Africa. |
| Glencore extracts, ships and refines raw materials from coal to corn. | Glencore extracts, ships and refines raw materials from coal to corn. |
| Mr Cooper noted that any deal would probably not face regulatory hurdles - the combined company would still only be the world's fourth-largest miner. | Mr Cooper noted that any deal would probably not face regulatory hurdles - the combined company would still only be the world's fourth-largest miner. |
| The Financial Times reported that a deal could be announced as soon as next week, before Xstrata's annual results on Tuesday. | 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. | The listing was London's largest initial public offering. |
| Glencore is the world's largest commodities trader, employing about 54,800 people in 30 countries. It made a profit of $3.3bn last year. | Glencore is the world's largest commodities trader, employing about 54,800 people in 30 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. | 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. |