Glencore investors back Xstrata deal
Shareholders in commodities trader Glencore have overwhelmingly approved its long-awaited $31 billion takeover of miner Xstrata, paving the way for one of the largest tie-ups in the sector to date.
After nine months of tense negotiations, late-night talks and last-minute twists, the deal to create a mining and trading powerhouse is within Glencore's grasp - a personal victory for its biggest shareholder, key dealmaker and chief executive, Ivan Glasenberg, who will also lead the combined group.
Xstrata’s own investors are due to vote later today in the Swiss town of Zug.
They are also expected to support the tie-up, after Qatar - Xstrata's second-largest shareholder - said it would back the share offer.
In what could be an embarrassing blow to Xstrata's board, however, investors could reject a separate £140 million "golden handcuffs" retention plan for Xstrata managers. Championed by the board as essential for delivering Xstrata's slew of major projects, the plan has been deeply unpopular with institutional shareholders.
Xstrata is shifting to a period of development after a decade of acquisitions that made it the world's fourth-largest diversified miner, and so the projects are key to its prospects.
The tie-up - long in the works, as Mr Glasenberg and Xstrata counterpart Mick Davis held on-off talks for years - has been dragged back from the brink of collapse on more than one occasion since it was first proposed in February.
Most recently in September, the deal seemed doomed before Glencore improved its bid at the last minute to woo Qatar's sovereign wealth fund.
Qatar's support in a rare statement last week increased the chances the tie-up could be all but certain within days.
That is, if a positive outcome at today's Swiss shareholder meetings is followed by approval from Europe's antitrust regulators, due to give their verdict by Thursday.
The deal will also be a rare payday for London's investment bankers, lawyers and a host of other advisers, at a time when mega-mergers are few, and successful deals even rarer. They will reap some $200 million in fees.