Canadian Manufacturing

Glencore delays shareholder vote on merger with Xstrata

Deal would create mining juggernaut with market capitalization of more than $80-billion

GENEVA—Commodities trader Glencore International PLC is reportedly raising its $34-billion takeover bid for Anglo-Swiss miner Xstrata by some nine per cent.

Xstrata announced it had received a proposal from Glencore to offer 3.05 new shares for each Xstrata share, up from the existing offer of 2.8 shares.

That original offer had been resisted by Qatar Holding, a major Xstrata shareholder.

Xstrata said Glencore also proposed that its chief executive, Ivan Glasenberg, would become CEO of the combined companies.

The earlier plan was for Xstrata CEO Mick Davis to take that role in the combined company.

Glencore, the world’s largest publicly traded supplier of raw materials such as oil, copper and wheat, had said earlier that it would rather walk away from its proposed merger than overpay.

Earlier Friday, Glencore adjourned a shareholder meeting that had been scheduled to approve the merger after its chairman reportedly told investors that there had been some developments overnight.

“Apologies for bringing you here … a new development has happened very recently,” Glencore chairman Simon Murray told shareholders in Switzerland.

Murray held a vote to adjourn the meeting and said a new date would be announced in due course but didn’t provide further details on what that development might be.

Glencore shareholders were due to vote on whether the company should go ahead with a merger that would create a mining juggernaut with a market capitalization of more than $80-billion.

But the plans were facing collapse as several major shareholders were demanding better terms to the deal.

The Wall Street Journal reported that if Glencore were to change its terms, it would have to reschedule the vote to give shareholders more time to consider it.

Glencore already holds a 34 per cent stake in Xstrata, which has major operations in Canada, including the former Falconbridge nickel and copper business.

The combined company would be called Glencore Xstrata and would control a chain of businesses from mining to refining, storage and shipping of basic commodities like coal, copper and corn.

Meanwhile, Glencore is currently awaiting final approvals to acquire Canadian agribusiness giant Viterra Inc. for $6.1-billion.

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