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Xstrata ditches Anglo merger bid

Reuters | Thu, 15 Oct 2009 08:50
[miningmx.com] -- MINING group Xstrata dropped its pursuit of rival Anglo American on Thursday after many Anglo shareholders rejected a "merger of equals" proposal and demanded a premium.

Xstrata said it believed in the strategic rationale of a merger with an Anglo merger, but was being "disciplined" and left the door open to resume its wooing of Anglo later.

UK regulators issued a "put up or shut up" ruling last week forcing Xstrata to either make a formal offer by October 20 or walk away for at least six months.

"Our decision not to proceed with an offer before the deadline imposed by the UK Takeover Panel reflects our disciplined approach to growth and our focus on the value proposition for Xstrata's shareholders in a merger," CEO Mick Davis said in a statement.

"We continue to assess a range of alternative growth options, in full recognition that transactions of this nature often take time and patience to mature."

On Monday, a top-10 shareholder in Xstrata told Reuters the company has indicated it would drop the merger plan for now.

A combination of Xstrata and Anglo American would have created the world's biggest producer of zinc, platinum, coal for power stations and ferrochrome, and the second-biggest company in coal for steelmaking and in copper.


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