Glenstrata rises

XSTRATA shareholders have overwhelmingly backed the proposed $52.8 billion all-share merger with Glencore International.

Noel Dyson
Glenstrata rises

It brings a major global miner with a strong interest in coal together with an international commodities trading house, creating an entity with an $80 million market capitalisation.

It has taken nine tortuous months, but the shareholder approval has cleared the way for the merger to proceed. The only things standing in its way are regulatory and UK court approvals.

The rationale for the merger is compelling, even if it comes at an awkward time for the mining industry and the coal sector in particular.

Bringing together a major mining company and a leading global commodities trader will create a unique business model in the natural resource sector. It effectively becomes a vertically integrated resources house.

Some of the benefits the two touted of the merger are:

  • to optimise capital expenditure, accelerate growth and increase returns by combining the growth pipelines of the two companies
  • to seek value at every stage of the value chain from discovery through to customer
  • an estimated $500 million a year of earnings before interest, tax, depreciation and amortisation synergies by the end of 2013.

A combined entity will certainly have more cash to chase merger and acquisition opportunities.

Xstrata chairman Sir John Bond said the logic of combining the two was compelling.

“The merger brings together two highly successful and entrepreneurial management teams to form a major integrated natural resources group,” he said.

“The combined group will be optimally positioned to succeed in a changing industry landscape, unlocking value along the entire value and distribution chain from operation to customer, while offering globally diverse customers a reliable, tailored and efficient supply of


Of course the combined group will have to do all of this without Xstrata chief executive officer Mick Davis who, along with Bond, decided to depart.


A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.


Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.


Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets


Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production


Mining Magazine Intelligence Automation Report 2023

An in-depth review of operations using autonomous solutions in every region and sector, including analysis of the factors driving investment decisions