Yesterday morning’s business news has been dominated by the proposed merger of Glencore and Xstrata. Glencore’s 34% holding of Xstrata shares had made a third party approach for Xstrata very difficult if not impossible.
Xstrata bought coal mines from Glencore in 2001, and after going public in 2002, it grew by a series of acquisitions, including the purchase of the Canadian nickel producer Falconbridge in 2006. Although Xstrata had a market capitalisation of c. $50bn, Glencore’s market capitalisation was $45bn.
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