Glencore - Xstrata: 2012’s Biggest Corporate Merger?

Though still in the negotiation stage, will the Glencore – Xstrata corporate merger be the biggest one for 2012?

By: Ringo Bones

At the moment after their latest meeting, the board of the mining group Xstrata is recommending their shareholders to back the Glencore merger. But shareholders will have to wait later this October to vote in their decisions. Currently estimated at 80 billion US dollars the slated corporate merger could be the biggest one yet for 2012 – it is even worth more money than the recent Facebook IPO. And given the scale of such merger, does it signal that the global economy is already passed the worst effects of the recent global economic slowdown?

Given the global mining sector is currently – more or less – in the doldrums – due to the recent economic slowdown of Mainland China, the merger of the mining giant Xstrata with the natural resource and commodities trading house Glencore seems to mirror that of the bullish economic climate of the go-go 1980s. There’s a distinct possibility that such merger could really happen because accountants from both Glencore and Xstrata are already examining each other’s books to check the extent of how much the figures are “fudged”. One of the principal underwriter’s of the Glencore – Xstrata merger is the Qatari Hedge Fund group. And if both parties manage to tackle existing regulatory hurdles, this could indeed be 2012’s biggest corporate merger.