Glencore Xstrata Makes Strong Stock Debut

Glencore Xstrata Plc (LON:GLEN), the world’s biggest zinc miner and exporter of coal for power stations, rose on its first day of trading as a combined company in London, as investors banked on potential dividends and future cost savings resulting from economies of scale from one of the largest deals in recent years.

After more than a year in the making, the Anglo-Swiss commodities trader Glencore yesterday officially completed its $30 billion all-share takeover of the Switzerland-based mining giant Xstrata Glencore Xstrata Saga Comes to an End. On its first day of trading on Friday, May 3, the newly combined company’s stock price rose more than four percent ahead of an investor presentation by Glencore Xstrata’s Chief Executive Officer, Ivan Glasenberg.

During the event, the CEO promised cost-savings, largely closing down offices of Xstrata, including the headquarters of the mining group in Zug, the Swiss town near Zurich, and in London, and through a “reduction of management layers”.

The company further promised “elimination of bureaucracy and duplication”. Flagging the potential for special dividends and share buybacks, Glasenberg said: “Excess capital will be returned to shareholders.”