[miningmx.com] – ALL eyes are on Ivan Glasenberg, CEO of Glencore
Xstrata from today with analysts saying the $30bn combination of Glencore and
Xstrata is only the beginning of the South African’s acquisition strategy.
“This is not the endgame, this is the beginning,” analyst Chris LaFemina at Jefferies
told newswire service, Reuters.
“Glencore wants to buy when no one else wants to buy, and what no one else wants to
buy – that is when no one else is bidding and you can buy things cheap. That time is
clearly now,” he added.
“In terms of hunger, ambition, I can’t see any reason why Ivan Glasenberg’s ambition
has been diminished as a consequence of this deal,” said analyst Paul Gait at Sanford
Bernstein in London. “He has a greater awareness of his ability to get deals of this
scale done,” he said.
And opportunities could be made available sooner rather than later amid a climb down
in commodities prices which has made some companies vulnerable to a takeover,
including Xstrata’s oft-mentioned target, Anglo American, Reuters said.
“I still see Anglo as vulnerable, and I see Glencore as a natural buyer for it,” Gait told
Reuters.
First, however, it was necessary to bed Xstrata down especially as the majority of its
senior managers had quit the company ahead of the merger conclusion.
“They clearly need to bed down Xstrata and if the strong dollar persists, then
commodity prices will remain subdued and so will valuations … they can sit back and
wait,” Mark Holden, senior fund manager at Ignis Asset Management, said. “That
doesn’t mean that if an opportunistic deal came up, that they wouldn’t try to get
involved – and so they should.”
