(Reuters) - Glencore has raised its bid for miner Xstrata in an 11th-hour effort to rescue one of the sector’s largest ever deals from collapse after opposition from rival shareholder Qatar.
Here is a look at Glencore, the world’s largest diversified commodities trader, and Xstrata.
* THE DEAL: The revised proposal from Glencore, which already owns 34 percent of Xstrata, is for 3.05 Glencore shares for every Xstrata share held. At current prices, that is worth around $36 billion (22.4 billion pounds), making it the biggest takeover deal in the industry since Rio Tinto’s acquisition of Alcan.
The previous offer ratio was 2.8. Qatar, Xstrata’s second-largest investor, had demanded 3.25.
The combined group would rank as the world’s fourth-largest diversified natural resources group, with operations from oil wells and mines to logistics and sales.
- Founded as Marc Rich + Co. in 1974, it became Glencore in 1994 when Marc Rich sold his stake. Headquartered in Baar, Switzerland, Glencore employs close to 3,000 people in its marketing operations and 58,000 people in 33 countries in its industrial operations.
- Glencore’s net profit for the first half of 2012 dropped 26 percent to $1.81 billion, putting the miner on track to match its 2011 full year. Its trading business contributed 44 percent of operating profit in the six months, with the remaining income coming from its industrial assets, mines to oil wells.
- Business Segments: Metals and Minerals, Energy Products and Agricultural Products
- Major Shareholders:
Ivan Glasenberg 15.92 percent
Daniel Francisco Maté Badenes 6.03 percent
Aristotelis Mistakidis 5.99 percent
Tor Peterson 5.29 percent
Alex Beard 4.63 percent
- The roots of Xstrata date back to 1926 when Swiss infrastructure investment company Südelektra AG was founded. The company was renamed Xstrata AG in 1999. Xstrata plc was created through an IPO on the London Stock Exchange in March 2002, when it simultaneously bought $2.5 billion of Glencore’s coal assets.
- Xstrata operates in more than 20 countries and employs around 70,000 people globally.
- Xstrata, one of the world’s largest producers of copper and thermal coal, reported a 31 percent fall in first-half profits, despite spending cuts that helped it to offset increasing wages and higher costs of materials and fuel.
Xstrata’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the first six months of 2012 were just over $4 billion. Operating profit dropped 42 percent to $2.45 billion.
- Operating profit at the copper unit, which normally accounts for almost half of group profit, virtually halved in the first six months of 2012, as Xstrata shifts to a newer generation of mines.
- Major shareholders
Glencore International AG 33.65 percent
BlackRock, Inc 4.51 percent
Qatar Holding LLC 11.64 percent
Norges Bank 2.93 percent
Sources: Reuters/Company Websites/investors.morningstar.com (editing by David Stamp; reporting by David Cutler, London Editorial Reference Unit)