Xstrata and Glencore merger ($31b)

Xstrata & Glencore’s $31b merger

Underground mining machinery - iMINCO Mining Information
Xstrata`s board has agreed to a $US33 billion (AUD$31.8b) mega-merger with commodities trader Glencore, and made a recommendation to its shareholders. The multi-billion pound merger had turned into a long-running saga amid shareholder discontent over the intended merger.

After seven months of haggling, the board recommended that shareholders vote in favour of Glencore’s improved offer, after gaining assurances about the combined company’s board and decoupling approval of incentive payments from a vote on the offer.

Glencore last month raised its offer from 2.8 of its shares for each of Xstrata’s to 3.05, after investors indicated the original bid undervalued the Xstrata. Xstrata is the world’s largest exporter of thermal coal and it delayed its response to Glencore’s revised proposal for a week to resolve some management issues and to determine the structure of the board.

The combination of the two commodity giants, five years in the making, would couple Glencore’s global trading operations with Xstrata’s coal, copper and zinc mines to create the world’s fourth-largest mining company. A successful acquisition would be the second-largest in the mining industry, after Rio Tinto’s $US38 billion purchase of Canada’s Alcan in 2007.

Xstrata Thermal Coal Deal With Japan
Xstrata is also in the news after it appears to have scored a lucrative 12-month supply deal with a Japanese buyer keen for Australia`s black gold, thermal coal. Reports in the Australian mining industry press indicates a contract has been signed with Japanese power firm Tohoku for 7 million tonnes of thermal coal which will be used to generate electricity.

Xstrata Mining Jobs
People looking to get into the mines, should be aware of these types of mergers and follow the unfolding story as there will be many new opportunities for mining jobs. Currently Xstrata are active in more than 20 countries worldwide and employ more than 70,000 people. They specialise in mining, alloys, coal, nickel, zinc and copper in Australia with mines in NSW, WA, NT and QLD.

There is a comprehensive careers page on the Xstrata website, as well as a dedicated page advertising mining jobs with Xstrata. For those interested in Xstrata, you can download the Xstrata 2012 half-yearly report from the website.

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