Glencore, Xstrata shareholders embrace merger
GENEVA, Switzerland - Shareholders of the Swiss commodities giant Glencore and Swiss mining group Xstrata on Tuesday, November 20 overwhelmingly approved a merger of the two companies to create a goliath capable of out-muscling nearly everyone in their field.
A full 99.42% of Glencore shareholders first voted in favor of the merger during an extraordinary general assembly meeting in Zug, central Switzerland, Tuesday morning.
On Tuesday afternoon, 90.8% of Xstrata shareholders followed suit during simultaneous meetings in Zug and London, clearing one of the final hurdles to the massive merger.
If it obtains the necessary regulatory approvals, Glencore-Xstrata should see the light of day, entering the stage as the world's fourth-biggest commodities company in terms of market capitalization, after BHP Billiton, Vale and Rio Tinto.
Glencore and Xstrata said last month they hope the combined company, with a market capitalization of around 67 billion euros ($85.5 billion) and with a combined turnover of $209.4 billion, could come into being by the end of the year.
The long deadlocked process advanced last month when Xstrata's main shareholder, Qatar Holding -- the energy-rich emirate's top sovereign wealth fund -- said it was satisfied with renegotiated terms of the deal.
A number of Xstrata shareholders had also been up in arms over a provision in the initial deal that would have provided massive bonuses to 73 Xstrata executives to ensure they remained with the merged company.
Under the new terms, shareholders voted separately on the merger and the bonuses, which are worth a total of £144 million (179 million euros, $229 million).
While voting overwhelmingly for the tie-up, 78.43% of the shareholders rejected the bonus plan.
The merger still requires approval by the European Commission, which has said it will give its ruling by November 22, and from competition authorities in China and South Africa -- two of the biggest producers and markets for commodities. - Agence France-Presse