Xstrata confirms Anglo American merger approach

Discussion in 'Stocks' started by ASusilovic, Jun 21, 2009.

  1. Mining group Xstrata on Sunday confirmed it had made an approach to rival Anglo American about a merger that would create one of the world's biggest mining companies, according to a company statement.

    The Xstrata statement made no mention of figures, but said it believed a merger would be "highly compelling" which would ultimately "significantly enhance shareholder returns".

    "The combination would create a premier portfolio of operations diversified across multiple commodities and geographies, with enhanced scale and financial flexibility to fund future growth," the company said.

    "Xstrata has already quantified substantial operational synergies from the combination that are not available to either company operating alone," it said.

    Investment banks Goldman Sachs and UBS are believed to be advising Anglo, while Xstrata is being advised by Deutsche Bank and JP Morgan Cazenove.

    The activities of the two companies overlap in many areas. Both own coal assets in Australia and South Africa, which suggests a merged group could make big cost savings.

    There could also be potential savings across their copper mining operations.

    Japanese investment bank Nomura has estimated a potential merger could achieve cost savings of 700 million dollars a year, the Telegraph said.


  2. Antitrust idiots on all continents ought to wise up and say no to these monopoly forming monsters.

    In the end, where do these "savings" go???

    No more megamergers, period!

    Look what happened to the great bank mergers of the last decade?!