Arab Today, arab today xstrata glencore announce new deal for massive tieup
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Arab Today, arab today
Arab Today, arab today

Xstrata, Glencore announce new deal for massive tie-up

Arab Today, arab today

Arab Today, arab today Xstrata, Glencore announce new deal for massive tie-up

Bern - AFP

Swiss mining group Xstrata and commodities giant Glencore said on Monday they had agreed on new terms for their tie-up to create a massive company worth about 70 billion euros ($90 billion). \"The Glencore directors and the independent Xstrata non-executive directors announce that they have reached agreement on the final terms of a revised recommended all-share merger of equals, on the basis set out in this announcement,\" they said in a statement. The general assemblies of both Swiss companies had been set to approve the blockbuster merger at the beginning of September but the deal ran into major resistance from several Xstrata shareholders demanding better conditions. Qatar Holding, which is wholly owned by Qatari\'s sovereign wealth fund and is the single biggest shareholder in Xstrata with more than 12 percent of its shares, had led the opposition. The revised terms mean that Xstrata shareholders will receive 3.05 Glencore shares, which the companies said represents a 17.6-percent premium on the price of the miner\'s shares before the merger bid was announced in February. A key disagreement that had held threatened the deal, massive retention payments to senior Xstata managers to ensure they remain with the merged company, has been left to shareholders to vote upon. While a rejection of the payments would not block a merger, the directors of the companies recommended that shareholders back the incentives. \"Without the ability to retain key Xstrata managers to run the combined group\'s mining operations through the Revised Management Incentive arrangements, the independent Xstrata non-executive directors believe that the value proposition of the combined entity is at risk,\" said Xstrata non-executive director John Bond said in a statement. The revised deal would see Xstrata chief executive Mick Davis lead the combined group for six months then Glencore\'s Ivan Glasenberg take over as chief executive. A Xstrata executive would take over Davis\' position as executive director of the merged group\'s board. The updated terms are to be sent to shareholders in October and the companies said they expect shareholders to vote on the merger so the companies can combine before the end of the year.

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