EDWARD WEST
Published: 2009/10/05 06:38:39 AM
ANGLO American’s cash flow could benefit from a global recovery and rising platinum and diamond prices which would reduce the prospect of its shareholders being tempted to accept an offer of a merger from Xstrata, analysts said on Friday.
Xstrata approached Anglo in June with a merger-of-equals proposal when their market valuations were about £20bn each. Its CEO Mick Davis believed the merger could create a £53bn group that was almost the same size of rival Rio Tinto.
Xstrata argued that 1bn in synergies could be extracted, more than 2bn of cost-cutting and procurement benefits that Anglo was already seeking .
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