THE “merger of equals” of Glencore and Xstrata will create a corporate titan worth an estimated £50bn.
The firms are headquartered within 3km of each other in Switzerland, and have been the subject of speculation over a possible tie-up for months.
A merger would mean a combined workforce of 127,500 with revenue of $175.5bn (£110.9bn).
The deal brings together Xstrata – a miner with decades of practical experience – with the marketing might of Ivan Glasenberg’s Glencore, which completed a high profile IPO last year.
Some analysts suggested that bringing together the two strands would mean the forming of a new powerhouse to line up against the likes of rivals Rio Tinto and BHP Billiton.
ADVISERS: JP MORGAN
IAN HANNAM
CHAIRMAN OF CAPITAL MARKETS
A STRING of advisers are involved in the negotiations over the potential merger between Xstrata and Glencore. JP Morgan’s Ian Hannam is expected to be one of the key advisers to Xstrata. Hannam is regarded as the “doyen of the mining industry” by corporate financiers. Xstrata has also called on Nomura, Goldman Sachs and Deutsche, while Glencore has recruited Citigroup and Morgan Stanley.
David Wormsley at Citigroup and Thomas Gottstein at Credit Suisse have advised the firm before.
A total of $140m in fees is up for grabs for the banks advising.
