Qatar Demand Puts Glencore-Xstrata Mega Merger in Doubt
A huge merger between commodities giants Glencore and Xstrata was thrown into doubt Wednesday after the sovereign wealth fund of Qatar, Xstrata's second-largest shareholder, opposed the deal's terms.
Qatar Holdings (QH) said in a statement to the London Stock Exchange that "whilst it sees merit in a combination of the two companies, it is seeking improved merger terms."
Both Switzerland-based Glencore and Xstrata are listed in London.
Commodities trader Glencore and miner Xstrata formalised in February a highly anticipated deal to create a raw materials juggernaut with a market capitalisation of $90 billion (72 billion euros).
Glencore is offering 2.8 of its shares per Xstrata share.
But QH has now said that "an exchange ratio of 3.25 new Glencore shares for every one existing Xstrata share would provide a more appropriate distribution of benefits of the merger whilst properly recognising the intrinsic stand-alone value of Xstrata."
By AFP, 27/06/2012