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Glencore $31 Billion Deal for Xstrata Looking Completed: Energy

Bllomberg - Nov 16, 2012

Glencore International Plc (GLEN)’s $31 billion bid for control of Xstrata Plc (XTA) has never looked so certain after the sovereign wealth fund of Qatar threw its support behind the biggest takeover of the year.

Qatar Holding LLC, the second-largest shareholder of the target, said it will back Glencore’s offer of 3.05 of its shares for each of Xstrata’s. Shares of Xstrata traded at 2.96 to those of Glencore in London today, the highest ratio on record and an indication investors expect the transaction to be completed.

“The deal has greater chance to succeed as Qatar is pivotal in the voting process,” Alain William, an analyst at Societe Generale SA (GLE), said in a report. The discount that Xstrata is trading at compared with the offer may narrow further “in the coming days,” William said.

The purchase will bring Glencore, a cotton-to-crude-oil commodities trader, Xstrata’s operations in mining coal, nickel, zinc and copper. The combined entity will have interests in about 35 coal mines in Colombia, Africa and Australia. It will account for about 10 percent of global seaborne exports of the fuel. Glencore handles 3 percent of the world’s daily oil consumption.

Read Full Article from Bllomberg

- Posted: 2012-11-16 15:05:18

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