Glenstrata Completion Date Pushed Back

on Jan 18, 2013

**Third Delay in Completion Date**

As reported by The Financial Times on 18 January 2013, commodities trader Glencore (LON:GLEN) today pushed back the date for completion of its $33 billion (£20.7 billion) tie-up with Anglo-Swiss miner Xstrata (LON:XTA) for the third time, citing lengthy antitrust regulatory processes in China and South Africa.
Without yet having secured the clearance of the respective authorities, the Swiss commodity trader and the London-listed miner confirmed today they had pushed back the longstop date. The two companies announced that the deadline for finalising the merger was now March 15 — six weeks later than the January 31 date the firms set in December, which itself represented a month delay. Without this further extension to the deadline the deal to create the world’s fourth-largest diversified mining company would have collapsed on a legal technicality.

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Glencore said in a statement: “The parties have agreed the new longstop date in order to give them the flexibility to complete the merger after the release of the preliminary results.”
**Awaiting Green Light from China and South Africa**
While the merger deal between Glencore and Xstrata was renegotiated last year, causing delays to an original October 31 deadline, some dealmakers see the third extension as another example of the complexity of the takeover, which must get clearance from a number of global regulators. Having already received a conditional approval from the European authorities, Glencore and Xstrata are now awaiting the green light from antitrust regulators in China and South Africa. The two mining companies held talks with China’s Ministry of Commerce this week and are still waiting for regulatory approval, while South Africa’s Competition Tribunal will start commence a hearing on the acquisition today expected to run through to January 28.

!m[Glencore and Xstrata to Extend Longstop Date for Merger as Regulatory Processes Remain Ongoing](/uploads/story/1250/thumbs/pic1_inline.png)
**Glenstarta to Face Opposition from South Africa’s Eskom**
Glencore and Xstrata are expected to face stiff demands from South Africa’s main electricity provider and unions at the South African Competition Tribunal hearing. The country’s state-owned electricity provider, Eskom Holdings Ltd., previously said it does not want to block the merger, but it will seek to protect its ability to obtain sufficient and competitively priced coal. Eskom is expecting the competition authority to implement conditions to ensure that coal supplies to the company are not impacted as a result of the deal.

Presenting a further obstacle on the way to the merger’s approval, South Africa’s National Union of Metal Workers also said it will seek limits on layoffs. The authorities echoed workers’ concerns. Earlier this week, the Competition Tribunal said in a statement about the Glencore-Xstrata deal: “The Competition Commission assessed the merger and concluded that although the transaction was unlikely to cause a substantial lessening in competition, it raised public interest concerns because the merging parties intended to retrench a number of employees.”
**As of 18 January 2013, 11:14 GMT, the Glencore share price was £380.80, or 0.24 per cent up from yesterday’s closing level of £379.04. As of the same time, the Xstrata share price was 0.40 per cent up at £1,142.50 a share.**


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