Glencore/Xstrata merger approved
Tuesday 20 November 2012
A multibillion-pound merger to create a new natural resources powerhouse was approved by shareholders today - but without paying a controversial retention package to senior managers.
Commodities trader Glencore and mining giant Xstrata will merge under a £56 billion deal following months of wrangling between the companies and investors.
Glencore shareholders backed the move this morning, while Xstrata investors voted in favour of the deal as long as a £227 million pay deal for its top managers was not included.
Xstrata later said the deal would go ahead without the retention package in a major coup for Glencore chief executive Ivan Glasenberg, who will head the newly formed firm.
Xstrata and Glencore - among the top 20 firms on the London stock market - will have operations in 33 countries and should be better able to compete against bigger rivals BHP Billiton and Rio Tinto once the deal completes.
The companies still need competition approval by the European Commission.
Sir John Bond, Xstrata chairman, said he would step down once a new independent chairman of the Glencore-Xstrata group was found, after the incentive package was voted down.
He said: "I have said consistently that I would do what is in the best interests of the company."
Xstrata chief executive Mick Davis added that he regrets the decision of shareholders not to approve the retention arrangements as it will introduce "unnecessary risks to the merged company's future value proposition".
He went on: "Glencore Xstrata has the potential to become a very significant company in the resources world and Xstrata's people will be a critical element of this success."
Glencore, the world's biggest commodities trader, with products including oil, coal, gold and foodstuffs, has been circling Xstrata for a number of years and has already built up a sizeable stake in the group.
Last year Glencore became the first company in 25 years to be fast-tracked into the FTSE 100 Index in London's largest flotation.
Anglo-Swiss firm Xstrata is the world's biggest exporter of thermal coal and also produces copper, nickel and zinc. It also has a lead smelter in Kent which employs around 100 staff.
The two firms were forced to address board composition concerns, offering assurances that Xstrata will retain the majority of directors on the combined board.
Mr Glasenberg improved the terms of the bid earlier this year after former prime minister Tony Blair was reportedly drafted in to help broker a meeting between Glencore and Qatar.
Middle East sovereign wealth fund Qatar Holdings - Xstrata's second largest shareholder - had threatened to block the merger because it believed the original deal was too low.
Mr Glasenberg increased the bid but demanded control of the combined group in return.
Under the original terms, Mr Glasenberg was due to be deputy chief executive in the new firm, with the top job going to current Xstrata boss Mick Davis.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 Naomi Wolf reacts to Isis 'conspiracy theories' critism after she questions whether beheading videos are real
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Douglas Carswell tells Ukip to stop blaming foreigners as youth poll shows Nigel Farage is even less popular than Nick Clegg
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...