Xstrata-Glencore merger gets SA backing, awaits Chinese approval
London (Platts)--22Jan2013/531 am EST/1031 GMT
A decision Tuesday by the South African Competition Tribunal to clear
the merger between Glencore and Xstrata means the deal now awaits approval
from the Chinese competition authorities, Xstrata said.
The Competition Tribunal conditionally approved the merger subject to
employment conditions, stipulating that the merged entity should limit
retrenchments to a maximum of 80 skilled employees and 100 semi-skilled and
"Completion of the merger remains conditional upon the receipt of the
outstanding regulatory approval in China and completion of the Xstrata court
process," as well as Glencore giving effect to the commitments required by
the European Commission, Xstrata said in a statement.
In November, the EC said clearance of the merger was conditional on the
termination of Glencore's offtake arrangements for zinc in the European
Economic Area with Nyrstar, the world's largest zinc producer, and the
divestiture of Glencore's minority shareholding in Nyrstar, which currently
stands at around 7.79%.
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Shareholders of Xstrata and Glencore voted November 20 in favor of the
$31 billion combination of the two Switzerland-based commodities
heavyweights, although Xstrata's shareholders rejected a controversial
retention bonus plan for the company's senior management.
The deadline for the closing of the merger of Xstrata, the world's
fifth-largest metals and mining group, and Glencore, the world's leading
metals and thermal coal trader, has been extended for a second time to March
15 from January 31, the companies said last week.
The deadline had previously been extended to January 31 from December 31
on December 10, due to the ongoing regulatory processes in South Africa and
Glencore is scheduled to release its preliminary results for the year
ended December 31, 2012, on March 5 and both parties have agreed the new long
stop date in order to give them the flexibility to complete the merger after
the release of the results.
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