Glencore sails straight into FTSE with £6.7bn flotation

World's largest commodity trader names Simon Murray as its new chairman

Glencore has unveiled plans for a mammoth listing next month that will make the Swiss commodities trader only the third company ever to warrant immediate inclusion into the FTSE 100 index of leading shares.

The dual London and Hong Kong float will give investors the chance to buy up to 20 per cent of the Barr-based firm, raising up to £6.7bn in one of London's biggest public offerings on record. With an expected market value of around £36bn, Glencore would account for more than 1 per cent of the entire FTSE All-Share index, thus winning it a coveted blue-chip berth, a feat only achieved twice before with the listing of BT in 1984 and BG in 1986.

The listing will mark the newest chapter in the evolution of the business founded in 1974 by Marc Rich, the oil trader indicted for tax evasion, charged with tax fraud and then pardoned by Bill Clinton at the end of his presidency.

Mr Rich has long since left – he sold his interest in 1994, when the business was renamed Glencore – and the trading house has grown into a key player on the commodity markets.

Today, Glencore boasts an addressable share of around 60 per cent of the zinc metal market, 50 per cent of the copper metal market and 45 per cent of the lead metal market.

In addition to other metals and minerals, the firm has interests in the oil, coal and agricultural products, and owns more ships that the Royal Navy. Going public will give the firm the firepower to compete in the global rush for resources and earn vast fortunes for the 500-odd shareholders in the business. Once listed, Glencore said it would look to maintain or raise its total ordinary dividend every year. Currently, it expects to declare an interim payout of £214m alongside its half-yearly results in August.

News of the float was accompanied by details of a revamped board, with the former BP boss Tony Hayward, who resigned from the oil giant amid controversy in the wake of the Gulf of Mexico oil spill last year, being named as the company's senior independent director.

Peter Coates, the chairman of the Australian gas company Santos, Leonhard Fischer, the chief executive of the financial services group RHJ International, William Macaulay, the chairman of the energy investor First Reserve, and the Hong Kong businessman Li Ning were named as independent non-executive directors.

The initial announcement was silent on the identity of the new non-executive chairman, with Simon Murray, the former Vodafone board member, being named to the post hours later in the afternoon. Glencore chief executive Ivan Glasenberg and chief financial officer Steven Kalmin will sit on the board as executive directors.

"Over many decades, we have developed Glencore into an unrivalled global integrated commodity producer and marketer, active in almost every bulk commodity market," Mr Glasenberg said. "An IPO is the next logical step in our development and strategy. It will provide us with the financial flexibility to capitalise upon the long-term growth opportunities throughout our business and achieve further sustainable growth."

Glencore's inclusion in the leading share index will mean the demotion of the smallest of the current crop of FTSE 100 stocks. Though subject to market fluctuations between now and the time of its float, companies in the firing line include the private-equity group 3i, which was at the bottom of the index in terms of market value on Wednesday night, and Investec, the financial services group which was second from the bottom, according to figures from the index compiler.

Glencore in numbers

25 The number of years since a listing led to a company's immediate inclusion in the FTSE 100 index.

£5bn The estimated value of the stake held by its South African chief executive Ivan Glasenberg.

485 The number of employers who own shares in the company and who will net a windfall in the IPO.

35 per cent The stake Glencore holds in the mining giant Xstrata, which is also listed on the FTSE 100.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
News
Taylor Swift is applying to trademark song lyrics from 1989
people
Voices
The popularity of TV shows such as The Liver Birds encouraged Liverpudlians to exaggerate their Scouse accent
voicesWe exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
Life and Style
Parker says: 'I once had a taster use the phrase 'smells like the sex glands of a lemming'. Who in the world can relate to that?'
food + drinkRobert Parker's 100-point scale is a benchmark of achievement for wine-makers everywhere
News
i100
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing