ANGLO AMERICAN, led by chief executuve Cynthia Carroll, snubbed rival miner Xstrata&rsquo;s takeover approach last night, calling its rival&rsquo;s terms &ldquo;totally unacceptable&rdquo;.<br /><br />Anglo said Xstrata&rsquo;s &pound;40bn plus merger proposal was &ldquo;unattractive&rdquo; and would hurt its interests in the platinum, iron ore and diamond markets. Xstrata has strong coal and copper interests. <br /><br />Anglo added that its current business strategy of cutbacks on investment would make &ldquo;substantial savings&rdquo;.<br /><br />Xstrata, led by chief executive Mick Davis, expressed disappointment at Anglo&rsquo;s &ldquo;rapid rejection&rdquo; of its all-share &ldquo;merger of equals&rdquo;.<br /><br />Xstrata claimed its proposal to merge &ldquo;two world-class companies&rdquo; was &ldquo;highly compelling&rdquo;.<br /><br />It was last night unclear whether Xstrata would sweeten the terms of its approach for Anglo, and analysts remained divided on whether a deal would be possible following the rejection.<br /><br />Industry observers suggest a merger would make sense because of the vast cost savings that could be made.<br /><br />&ldquo;Anglo is just lifting a skirt and showing an ankle,&rdquo; Seven Investment Management&rsquo;s Justin Urquhart-Stewart said last night. &ldquo;By rebuffing Xstrata, Anglo will now look far more attractive. This is the mining equivalent of &lsquo;ding dong&rsquo;,&rdquo; he added.<br /><br />Others doubt Xstrata is strong enough to woo Anglo, as it has already raised &pound;4.1bn through a rights issue and has a substantial debt pile.<br /><br />The proposed marriage between the two titans comes after a joint venture between mining giants Rio Tinto and BHP Billiton. <br /><br />Miners all around the world are seeking to cost-cut through consolidation, as they battle against debt and surplus capacity in the economic downturn.<br /><br />Anglo&rsquo;s chief executive Cynthia Carroll is under fire from shareholders who say she has made unnecessary expensive acquisitions.<br /><br />Xstrata boss Mick Davis has a fierce reputation as a deal maker, and some analysts have indicated he would be good for Anglo.<br /><br />It is understood that Harbor International Fund, an investor in both Anglo and Xstrata, supports Davis in his desire for Anglo. A merger would be &ldquo;a good idea,&rdquo; it said.<br /><br />It is not the first time Xstrata and Anglo have talked: in late 2007 Davis sounded out Anglo as a potential buyer for Xstrata, but a deal was never cut.