By Alex MacDonald
LONDON--The European Commission said Wednesday it has extended
the review of Glencore International PLC's (GLEN.LN) $70 billion
merger proposal with Xstrata PLC (XTA.LN), after Glencore submitted
remedies to allay EU competition concerns.
The Commission said on its website that the deadline for
reviewing the all-share deal to create the world's fourth-largest
diversified miner has been extended to Nov. 22 from Nov. 8 after
the commodities titan submitted concessions to the EU. The
Commission said the areas of concern involved the mining of hard
coal and other non-ferrous metals.
The anti-trust regulator didn't disclose which specific metals
or ore it had expressed concern over. Nor did it disclose the
remedies that Glencore submitted Tuesday but an EU official
familiar with the review said the concerns were focused on the
combined company's market share in refined zinc metal.
The combined company would be the world's largest zinc miner and
the fifth-largest exporter of hard coal--which is used to make
steel should the deal close by the end of December, as
expected.
Analysts and arbitrage funds alike expected the Commission to
raise concerns about the combined company's market concentration in
refined zinc metal--given a 2006 commission ruling which determined
that the zinc market operates on a regional basis rather than a
global basis.
Glencore and Xstrata would have a combined market share of about
50% in European zinc metal, according to Macquarie Research
calculations. This compares to a 9.1% market share in the global
zinc metal market, according to UBS calculations.
A Glencore spokesman declined to comment.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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