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GLENCORE/XSTRATA MERGER: More M&A ahead as Glencore and Xstrata agree merger

February 08, 2012 - 10:47 GMT Location: London

KEYWORDS: Glencore , Xstrata , merger , Anglo American , First Quantum , ENRC

Glencore and Xstrata have formally confirmed they have agreed the terms of a recommended all-share merger of equals worth $90 billion, prompting one key question: what happens next?

Analysts have previously suggested the creation of the new company, which will be known as Glencore Xstrata International, could prompt others in the market to look for tie-ups of their own to compete. While this is still a possibility, the suggestion now appears to be that the merged entity will be more interested in new M&A activity than its peers, they said. “This deal has been so long in the making and it’s been the obvious move for both companies for such a long time that there’s not that much to read across to the rest of the market,” one analyst at a major investment banking group told Metal Bulletin. “It’s going to be more interesting to see who they might go after next; that’s the real question,” he added. Anglo American has been suggested as a possible target for the newly combined entity, although several analysts have said a...

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