Commodities giant Glencore International PLC (GLEN.LN) has
offered to cancel its zinc deal with Nyrstar NV (NYR.BT) in a bid
to clinch approval from European Union regulators for its $70
billion merger with Xstrata PLC (XTA.LN), according to a person
familiar with the negotiations.
Glencore submitted the offer to the European Commission on
Tuesday in a bid to allay concerns over the merged entity's market
share in refined zinc metal.
The person said Glencore was confident of its offer: "It should
address the issue of competetitive overlap." The person added that
ending the exclusive contract with the Belgian firm would represent
the loss of "significant tonnage."
In addition, Glencore is also understood to have offered to give
up its minority stake in Nyrstar. "It's a logical thing to do as
you would then break the structural link with Nyrstar," the person
said. "The Commission like neat and tidy solutions in these cases,
which this is."
On Wednesday, the commission said it would extend its review of
the merger to take account of Glencore's offer, or so-called
remedies. It will now make its decision by Nov. 22, before which it
will need to consult with Nyrstar as well as other market players
and rivals.
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.
-Write to Vanessa Mock at vanessa.mock@dowjones.com
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