Xstrata backs £56bn Glencore mega-merger

City A.M. Reporter
Xstrata has green-lit the £56bn merger with Glencore, though with conditions.

An independent board of directors at the miner has revised the voting structure to allow shareholders to support the deal, but object to the retention plan for key managers.

Sir John Bond, chairman of Xstrata, said today that following opposition from shareholders the directors have decoupled approval of the management incentive resolutions from approval of the merger itself.

Xstrata chief executive Mick Davis will lead the new group for an interim period of six months before handing the tiller over to Glencore chief Ivan Glasenberg.

Mick Davis, Xstrata chief executive, said today: “The strategic rationale for combining Xstrata and Glencore remains highly compelling. A merger will fuse the respective strengths of the two companies into a unique, vertically integrated natural resources group.

“It will also resolve Xstrata’s ownership structure in a way that I believe will create superior shareholder value as part of a larger, more diverse company with an enhanced ability to grow and create value for its owners.”