Xstrata paves Glencore mining merger

Mining group Xstrata and commodities firm Glencore have agreed new terms for their tie-up, clearing the way for the biggest-ever mining industry merger. The original deal looked set to founder on shareholder resistance. Swiss mining group Xstrata gave its blessing to the $33 billion (25.5 billion euros) bid from commodities trader Glencore on Monday, ending months of wrangling over details of the deal, which was first announced in February this year. "The Glencore directors and the independent Xstrata non-executive directors announce that they have reached agreement on the final terms of a revised recommended all-share merger of equals," the two firms said in a joint statement. The tie-up, creating a global commodities behemoth worth about $90 billion, was threatening to founder on Xstrata shareholders resistance, led by Qatar Holding, which owns 12 percent of Xstrata shares. The opposition forced Glencore to hike its original bid of 2.80 euros per share offered to Xstrata stockholders to 3.05 euros. In addition, the revised deal lays aside differences over retention payments to senior Xstrata managers to ensure they remain with the merged company. It now foresees a sum of $226 million to be paid to about 70 Xstrata top executives to dissuade them from leaving. Describing their commitment as vital, Glencore Chief Executive Ivan Glasenberg said that the new company was seeking to capture the full synergy of the transaction and realize the potential of both companies' strong long term organic growth plans. Under the revised deal, Xstrata Chief Executive Mick Davis will lead the firm for the first six months, and then step aside for Glencore CEO Glasenberg. Xstrata and Glencore want shareholders to vote on the agreements as soon as possible, as they aim to get the merged company up and running by the end of the year.