...Case Study Glencore & Xstrata Creating the fourth largest global mining company Reference Code: ML00007-065 Publication Date: January 2013 WWW.MARKETLINE.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED GLENCORE & XSTRATA: CREATING THE FOURTH LARGEST GLOBAL MINING COMPANY © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED ML00007-065 /Published 01/2013 Page | 1 OVERVIEW Catalyst Glencore International, a commodity trading giant, is seeking to merge with diversified mining company Xstrata. The move was announced in February 2012 with the proposal accepted by shareholders in November 2012. The deal is worth $31bn and would create the fourth largest mining company in the world behind the top three of BHP Billiton, Vale, and Rio Tinto. The company would also possess leading positions in other commodities in power generation and agricultural products. Summary Glencore is a company which operates in commodity markets, including mining. The company engages in both industrial activity and marketing, which allows it to safeguard against volatilities in an individual market. Further, by engaging in marketing, the company is able to adapt more effectively to adverse conditions. Glencore has demonstrated value creation in its acquisitions, with notable acquisitions including Kazzinc and Viterra. The company’s size also now allows it to negotiate big contracts, as it did with Rusal. Glencore was fast tracked...
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...Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry in 2012 Diana Alvarez Valencia (1310200) University Canada West Dr. Paul Rome MGMT 661 Strategic Management Tuesday, May 12, 2015 Introduction and Problem Identification In this case study we will identify the problems that can be issued in the process of the merger between two of the largest commodities traders in the world, Glencore and Xstrata. It will provide the background of both companies, the situation analysis, identification of alternatives Companies Background. Glencore had been a trading company since their early years with the name of Marc Rich & Co. Glencore, was founded by March Rich; Rich was a consummate dealmaker, doing business with the entire world no matter their country background (fascist or communists). Moreover, Marc Rich always tried to get the cheapest price with his Middle Eastern contacts. His most important clients were embargoed nations like Israel and South Africa. In 1983, the US government indicted Rich on charges of illegal trading and tax evasion. After different issues and in the sake of create a better reputation the company – Marc Rich & Co. - rebranded itself as Glencore. (Hitt, Ireland & Hoskisson, 2013). Furthermore, one of the Glencore’s practices, is to get cheap tier 2 assets from doing business in developing countries considered high-risk by others rather than developing on its own. In 2002, Glasenberg become the CEO of the company.(Hitt, Ireland...
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...University of The Gambia [pic] NAME: Modou L Manjang DEPARTMENT: MANAGEMENT 1. A merger maybe defined as a combination of two or more companies to form one entity. This decision is usually mutual in both firms. In a merger, assets, employees and programs are combined to form either a new organization representing the best of the two companies or one of the companies posing as the surviving entity. 2. Glencore and Xstrata will have a great combining power. This is because Glencore operates in 40 countries from Australia to Argentina and Xstrata on the other hand is active in more than 20 countries globally. So this merger will result to a total number of 130000 employees with increased revenue of $200bn which would eventually create the world’s biggest exporter of coal for power plants and the largest producer of zinc. 3. The new changes would affect the structure, behavior and processes of the organization by the formation of a new executive body because there should be one organizational structure comprising of the different portfolios. Also, the employees will be eventually increased as the two companies merge together. Moreover, the culture of the newly formed organization will change as the two companies both had separate organizational culture. Lastly, they would also have the combining power of involving in commodities trading and mining and this will obviously the profitability and production level of the organization. 4. With...
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...10 October 2011 Europe Equity Research Diversified Metals & Mining (Metals & Mining) Glencore and Xstrata Research Analysts Liam Fitzpatrick 44 20 7883 8350 liam.fitzpatrick@credit-suisse.com Michael Shillaker 44 20 7888 1344 michael.shillaker@credit-suisse.com Nihal Shah 44 20 7888 3270 nihal.shah@credit-suisse.com James Gurry 44 20 7883 7083 james.gurry@credit-suisse.com Specialist sales: James McGeoch +44 20 7888 0751 james.mcgeoch@credit-suisse.com COMPANY UPDATE Merger potential ahead? Figure 1: Glencore vs XTA 12 month forward P/E 9.0 8.0 7.0 6.0 5.0 4.0 1 a 9-M y 2 a 6-M y 2 n -Ju 9 n -Ju 1 6-Jun 2 3-Jun 3 0-Jun 7 l -Ju 1 4-Jul 2 1-Jul 2 8-Jul 4 ug -A 1 ug 1-A 1 ug 8-A 2 ug 5-A 1 ep -S 8 ep -S 1 ep 5-S 2 ep 2-S 2 ep 9-S GLEN.L XTA.L Source: IBES consensus; prices as of 5 October 2011 ■ Summary: Following the recent underperformance and de-rating of XTA vs. Glencore, we examine the potential for an XTA-Glencore merger in this report. In keeping with its previous statements, we believe Glencore sees strong benefits to a deal and a combination would create an attractive highgrowth and differentiated major. The longer the relative rating gap exists, the greater the market’s focus on a potential transaction will likely become, in our view. At current levels, Glencore could use its premium-rated equity and pay a significant premium without a deal being dilutive, on our estimates. ■ Potential synergies: The main area of potential synergy we see is through...
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...Industry Group April 2013 Glencore’s Long March to Take Over Xstrata First published in Mining Journal, April 2013 At long last, Glencore has overcome the final regulatory hurdle and secured the approval of China’s Ministry of Commerce (MOFCOM) to acquire the 66 percent of Xstrata that it does not already own. But not before agreeing to part with one of the prized assets in Xstrata’s portfolio, the Las Bambas copper project in Peru. If no suitable buyer for Las Bambas is found by September 2014, Glencore will have to auction off one of its other copper assets of MOFCOM’s choosing. To clinch MOFCOM’s blessing of the deal Glencore also committed to continue offering longterm supply arrangements to sell copper concentrate to Chinese customers, as well as somewhat less stringent supply commitments on zinc and lead concentrates. It has been a long road for Glencore and Xstrata who announced their plan to combine in February last year. They have had to navigate the merger review processes in several major jurisdictions, which can frustrate the most patient of company executives. Glencore’s acquisition of Xstrata will unite one of the world’s largest producers and traders of commodities and one of the largest mining companies globally – but at what price? It was no surprise that competition authorities in those countries and regions most affected would closely scrutinize the deal. The transaction had to be approved by merger control authorities in Australia, China, the EU, South Africa...
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...Course Instructor BRACU Business School BRAC University Prepared By Shiab Khan (13164039) Sanzida Parvin (13164025) Tanzir Islam (13164087) SK Yaishi Binte Zaman (12264035) Ahammed Riaz(13164009) Date of Submission: April 2, 2015 BHP Billiton Limited Introduction: BHP Billiton is world’s largest diversified natural resources company. The company was created by the merger of two companies, BHP Ltd (An Australian mining company) and Billiton PLC (An UK based Company). BHP Billiton has created long time share holder value through the discovery, acquisition and development of natural resources. In the last few years, BHP Billiton has faced some governance challenges in conducting their business around the world. For overcoming those challenges several strategic drivers has been taken by BHP Billiton. This report mainly focused on external and internal environment, strength and weakness, Governance challenges and strategic drivers of BHP Billiton. Overview of BHP Billiton: BHP Billiton is a Dual Listed Company (DLC) comprising BHP Billiton Limited and BHP Billiton Plc. BHP Billiton was created through the DLC merger of BHP Limited (now BHP Billiton Limited) and Billiton Plc (now BHP Billiton Plc), which was concluded on 29 June 2001. BHP Billiton is a leading global resources company. The purpose is to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources. BHP Billiton are among the world’s largest producers of major...
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...CUTTING EDGE: OUR WEEKLY ANALYSIS OF MARKETING NEWS 12 March 2014 Welcome to our weekly analysis of the most useful marketing news for CIM, CAM and Sales Leadership Alliance members. Quick links to sections Marketing trends and issues Advertising Consumer perceptions of expense This study examines whether consumers make judgments about brands not just on the basis of what is communicated in advertising but on how the message is communicated. In particular it investigates the effect of perceived advertising expense and effort of the advertiser. An analysis of 4,000 consumers reveals that ads with higher-thanaverage perceived expense and effort have a positive effect on brand attitude, brand interest and word-of-mouth. In contrast ads with lower perceived expense have negative effects. International Journal of Advertising. Vol 33(1) 2014, pp137154 (Modig et al) Digital could make up for loss of print Online publishers and news websites enjoyed advertising growth of 18% last year according to the Association of Online Publishers (AOP) and Deloitte. Their data indicates that digital revenues grew at their fastest rate since 2008; this has been attributed to the rise of mobile, since advertising on smartphones rose by 60% in the last quarter of 2013. Deloitte says it expects publishers to innovate with flexible pricing such as a mixture of paid-for and free ad-funded models. Some publishers are already indicating that digital revenues are making up...
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