LONDON--The European Commission will decide by November 8
whether to clear commodities titan Glencore International's
(GLEN.LN) proposed merger with Xstrata PLC (XTA.LN) to create the
world's fourth-largest diversified miner, a filing by the
Commission on its website showed Wednesday.
Glencore formally notified the European watchdog on Tuesday of
its merger plan to create a mining juggernaut with a market
capitalization of about $70 billion, based on current share
prices.
Glencore originally launched its offer for the remaining shares
it didn't already own in Xstrata in February and has since raised
its offer price after facing opposition from Xstrata's
second-largest shareholder after Glencore, Qatar Holding, which had
threatened to block the deal in its original form.
The decision to formally notify the Commission, the European
Union's executive body, comes after a lengthy pre-notification
period which was aimed at making sure the deal could get regulatory
approval during the first phase of review.
If the European Commission isn't able to make a ruling within
the first 25 working days, the review may be extended by another
105 working days through a second-phase review.
The Commission is expected to review the combined company's
market power in various commodities. The two companies put together
would create the world's largest thermal coal exporter, largest
zinc and ferrochrome producer and the world's third-largest copper
producer.
Investment bank Jefferies said in a note that it expects
anti-trust concerns to be limited to the European zinc market and
said any such concerns could be resolved with appropriate remedies
such as asset sales.
Glencore and Xstrata both expect the deal to close by the end of
the year, although the deal still needs regulatory approval from
the EU, China and South Africa.
The merger proposal must also be approved by both Glencore and
Xstrata shareholders at extraordinary meetings that are likely to
be scheduled for some time in mid-November, according to two people
familiar with the matter.
--Vanessa Mock in Brussels contributed to this article.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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