Glencore open to acquiring Xstrata

THE partial float of Glencore International is expected to give the major commodities trader the “firepower” to possibly acquire diversified mining group Xstrata, Glencore chief executive Ivan Glasenberg has said.
Glencore open to acquiring Xstrata Glencore open to acquiring Xstrata Glencore open to acquiring Xstrata Glencore open to acquiring Xstrata Glencore open to acquiring Xstrata

Glencore chief Ivan Glasenberg

Blair Price

While a date is yet to be announced, the dual listing of Glencore on the London and Hong Kong stock exchanges is expected in the coming weeks.

Various reports indicate that around 20% of the Switzerland-based company will be floated to raise $US10 billion, providing an estimated market capitalisation of $US60 billion.

Glencore already owns 34% of Xstrata and is not ruling out acquisition activity.

London’s Financial Times reported Glasenberg as saying that the float would provide the firepower to target larger acquisitions “such as Xstrata”.

An unnamed mining analyst was also quoted as saying he expected Glencore would make a scrip-based offer for Xstrata within a year of the float.

Xstrata chief executive Mick Davis is already on the record as saying that an independently listed Glencore and Xstrata would be “unsustainable in the long term”

On the basis Glencore did decide to bid for Xstrata, there are estimates that the combined entity would have a market cap in the $US100 billion range, where it could compete against the likes of BHP Billiton, Vale and Rio Tinto.

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