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ANGLO AM PLC ADR Message Board

  • stotwx stotwx Apr 15, 2011 3:34 PM Flag

    XSTRata-glencore merger leads to...

    british newspaper, the telegraph, today, has article about the xstrata glencore merger eventually leading to takeover of anglo american...anyone out there on the boards have any ideas?

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    • There is no XStrata - Glencore merger -- yet. In fact, the Telegraph says that Mick Davis has resisted the idea of a merger. Additionally, Anglo will strongly resist a takeover -- they previously fended off XStrata. Also, the non-controlling interest in De Beers is a bit of a poison pill, unless the Oppenheimers come around. But the article is interesting. Here are some excerpts:
      """Glencore’s plan to hit up investors for as much as $11bn (£6.7bn) in its $60bn stock market flotation comes with a fully-formed shopping list that insiders claim will radically change the commodities industry.

      First and foremost is of course Xstrata, the London listed Anglo-Swiss mining group which Glencore already holds 34pc of.

      The two companies, which famously have a love/hate relationship, have been dancing around how to construct a merger for years.

      Last year Liberum Capital said putting the two companies together would create a formidable trading and mining colossus that could “deliver the scale to undertake very large capital projects or transformational M&A.”

      But Xstrata chief Mick Davis, who is just as strong willed as Mr Glasenberg, is understood to have resisted the idea of a merger with Glencore. Those on the Xstrata side were worried that the combination may be priced in Glencore’s favour rather than Xstrata’s. Instead, insiders say that for any merger to be considered Glencore first has to create a market value for its shares.

      But Xstrata is just the beginning. Glencore has already said it would target companies worth about $5bn, but most people assume that it will make much larger corporate acquisitions using its shares.

      Last week analysts at Bernstein tipped Anglo American as a Glencore takeover target.

      “We believe that Anglo American is the most likely acquisition target among the large diversified miners, and could envisage interest in the company from a number of its peers, especially considering Anglo's share price is trading on a 50pc discount to its sum of the parts,” said the broker.

    • Provide link - this seems highly improbable. Anglo isn't equivalent tot he old DeBeers you know.

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