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Glencore & Xstrata's $80bln merger talks

posted 2 Feb 2012, 08:10 by Mpelembe   [ updated 2 Feb 2012, 08:11 ]

Mining group Xstrata and commodities trader Glencore are in talks about an all-share deal that could create a combined group worth almost 80 billion dollars.

WORLD-XSTRATA/GLENCORE - News that Xstrata is in talks with Glencore came as no surprise.

The world's largest diversified commodities trader already owns a third of the fourth largest diversified mining group and a tie-up between the two Swiss-based businesses has long been expected.

Together the group would be worth almost 80 billion dollars and the takeover would the biggest ever seen in the industry.

Speculation about a potential tie-up increased after Glencore's 10 billion dollar listing last May.

It gave the trader the currency for deals.

The listing also allowed the market to put a value on Glencore - which was a key demand from Xstrata.

Glencore trades in metals, minerals and oil.

It has a variety of assets from mines to farmland and went public, partly to make more acquisitions.

Glencore shares have fallen 17 percent since its listing but that's not as far as Xstrata's.

News of the deal helped both companies - Xstrata's shares rose 13 percent after the news emerged while Glencore's rose almost six percent.

Sonia Legg, Reuters.