Xstrata, Glencore agree to a $90 billion mergerFebruary 7, 2012 - 14:24 AMT PanARMENIAN.Net - Mining company Xstrata and commodities dealer Glencore agreed to a $90 billion merger Tuesday, Feb 7, that will create the world's fourth largest natural resources company, The Associated Press reported. The announcement of the terms of the deal comes just a few days after the revelation that the two companies were in discussions about a long-mooted tie-up - merger discussions, codenamed 'Everest,' have gone on for years. The combined company will control a chain of businesses from mining to refining, storage and shipping of basic commodities like coal, copper and corn. Under the terms of the deal, Xstrata shareholders would receive 2.8 Glencore shares for each of their shares. That represents a premium of 15.2 percent based on Monday's closing prices. Glencore already had a 34 percent stake in Xstrata. The merger is projected to yield cost savings of $500 million in the first full year, primarily in marketing, while creating the world's fourth largest global diversified natural resource company, with operations in 33 countries. It will also give the combined company greater leverage to borrow money for its operations - a key advantage in the high-volume, low-margin commodities business. The new company would be the world's third-largest copper producer, fourth-largest nickel producers and the global leader in thermal coal, ferrochrome and integrated zinc production. The merger agreement was announced as Xstrata reported a 22 percent gain in full-year profit to $5.7 billion, compared to $4.7 billion a year earlier. Revenue was up 11 percent to $33.9 billion. Xstrata, based in Zug, Switzerland, was formed in 2002 when it bought Glencore's coal assets. The company mines copper in the Americas, zinc in Spain and ferrochrome and vanadium in Australia and South Africa. Glencore extracts, ships and refines raw materials from coal, to copper, to corn. It is based in the Swiss town of Baar but has its main listing in London. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | IDBank, Dalma team up for Caucasian Deer Reintroduction Program IDBank has joined Dalma Garden Mall’s Green Challenge to support the Caucasian red deer reintroduction project. Through Ucom’s support the 12th Sunchild Festival concludes On May 24-28, with the support of Ucom, the 12th international environmental festival Sunchild took place in Yerevan. U.S., Turkey emphasize importance of Armenia-Azerbaijan peace deal Jake Sullivan and Akif Cagatay Kilic have discussed the normalization process between Armenia and Azerbaijan. Armenia coach expects good football in Slovenia friendly The Armenian national team has left for Ljubljana a friendly match against Slovenia on June 4. |