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EU allows Glencore to acquire Xstrata
Source: Agencies |
November 23, 2012, Friday
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GLENCORE International Plc has won European Union approval for its US$33 billion takeover of Xstrata Plc after offering to end a zinc-purchase agreement with Nyrstar NV and to sell its stake in the largest producer of the metal.
Glencore's offer to scrap an accord to sell Nyrstar's zinc output in Europe and divest its stake of about 7.8 percent eliminated EU antitrust concerns that the combination with Xstrata would have been able to raise prices for zinc metal, the European Commission said in a statement yesterday. It will avoid buying Nyrstar's European zinc for 10 years.
Glencore, which gained shareholder backing for its Xstrata offer on Tuesday, previously had an agreement to sell all of Balen, Belgium-based Nyrstar's so-called commodity-grade zinc. Nyrstar produced about 1.1 million tons of the metal last year. Zinc accounted for 18 percent of Glencore's 2011 operating profit, and 10 percent at Zug, Switzerland-based Xstrata.
"The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanizers and carmakers can continue to produce valuable consumer goods at low prices and good quality," EU Competition Commissioner Joaquin Almunia said in the statement.
Nyrstar said a settlement needs to be negotiated with Glencore to terminate or change the zinc sales agreement.
"With respect to the divestiture of Glencore's minority shareholding in Nyrstar, Nyrstar will seek with Glencore to ensure that this is conducted in a considered manner," it said in an e-mailed statement.
Glencore's offer to scrap an accord to sell Nyrstar's zinc output in Europe and divest its stake of about 7.8 percent eliminated EU antitrust concerns that the combination with Xstrata would have been able to raise prices for zinc metal, the European Commission said in a statement yesterday. It will avoid buying Nyrstar's European zinc for 10 years.
Glencore, which gained shareholder backing for its Xstrata offer on Tuesday, previously had an agreement to sell all of Balen, Belgium-based Nyrstar's so-called commodity-grade zinc. Nyrstar produced about 1.1 million tons of the metal last year. Zinc accounted for 18 percent of Glencore's 2011 operating profit, and 10 percent at Zug, Switzerland-based Xstrata.
"The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanizers and carmakers can continue to produce valuable consumer goods at low prices and good quality," EU Competition Commissioner Joaquin Almunia said in the statement.
Nyrstar said a settlement needs to be negotiated with Glencore to terminate or change the zinc sales agreement.
"With respect to the divestiture of Glencore's minority shareholding in Nyrstar, Nyrstar will seek with Glencore to ensure that this is conducted in a considered manner," it said in an e-mailed statement.
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