Final hurdle cleared for Xstrata-Glencore merger
A long-awaited merger between Swiss commodities trader Glencore with mining giant Xstrata has won a green light from China's regulator, clearing a key final hurdle, Glencore announced on Tuesday.
Glencore said in a statement that Beijing had given its backing on condition that after the merger the group sells its interest in the Las Bambas copper mine project in Peru to Chinese-approved players by the end of September 2014.
In addition, China set supply conditions on the future minerals and mining powerhouse, which will rival top global commodities companies such as BHP Billiton, Vale and Rio Tinto.
"For a period of eight years from January 1st 2013, Glencore will continue to offer to supply Chinese customers with a minimum volume of copper concentrate annually under long-term contracts," it said.
Similar conditions were set for the zinc and lead markets.
Glencore also announced that the current chief executive of Swiss-based Xstrata, Mick Davis, had agreed not to take up the same role in the merged group.
Davis initially had been due to take the helm of the combined operation for six months, but Glencore's chief executive Ivan Glasenberg is to assume that role instead.
Chinese approval was the last step required for the merger to go ahead, with the European Commission as well as South African competition authorities already having given approval.
Glencore and Xstrata's shareholders voted in favour of the merger last November, with a view to sealing the deal by the end of 2012.
That target was pushed back to March 15, before again being shifted to April 16th due to delays in China's regulatory approval.
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Glencore said in a statement that Beijing had given its backing on condition that after the merger the group sells its interest in the Las Bambas copper mine project in Peru to Chinese-approved players by the end of September 2014.
In addition, China set supply conditions on the future minerals and mining powerhouse, which will rival top global commodities companies such as BHP Billiton, Vale and Rio Tinto.
"For a period of eight years from January 1st 2013, Glencore will continue to offer to supply Chinese customers with a minimum volume of copper concentrate annually under long-term contracts," it said.
Similar conditions were set for the zinc and lead markets.
Glencore also announced that the current chief executive of Swiss-based Xstrata, Mick Davis, had agreed not to take up the same role in the merged group.
Davis initially had been due to take the helm of the combined operation for six months, but Glencore's chief executive Ivan Glasenberg is to assume that role instead.
Chinese approval was the last step required for the merger to go ahead, with the European Commission as well as South African competition authorities already having given approval.
Glencore and Xstrata's shareholders voted in favour of the merger last November, with a view to sealing the deal by the end of 2012.
That target was pushed back to March 15, before again being shifted to April 16th due to delays in China's regulatory approval.
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