Xstrata approached Anglo with merger plan-report
LONDON, June 21 |
LONDON, June 21 (Reuters) - Mining group Xstrata XTA.L has approached its rival Anglo American (AAL.L) to propose a 41 billion pound ($67.07 billion) merger, the Sunday Telegraph reported.
The newspaper said Xstrata's Chief Executive Mick Davis was understood to have written to the board of Anglo last week to propose opening discussions about a deal. It was not clear whether Anglo had made a formal response, it said.
A spokeswoman for Xstrata declined to comment on the report and no one at Anglo American could immediately be reached for comment.
The report said Anglo was being advised by Goldman Sachs and UBS while Deutsche Bank and JP Morgan Cazenove were advising Xstrata.
The report said Xstrata had not yet outlined the terms of any deal, but said that commodities group Glencore, its 35 percent shareholder, was understood to have been made aware of the approach to Anglo and was thought to be supportive of a deal.
The Sunday Times newspaper, which also reported the story, said Xstrata's Davis had made the move after pressure from Black Rock and Capital Group, two other big shareholders.
Reuters reported last week that Xstrata was still keen for a marriage with Anglo but that it should be braced for another cold shoulder in spite of vocal match-making by some investors.[ID:nLF669621]
Xstrata has regarded Anglo as an attractive partner for several years and talk about such a combination has resurfaced in the wake of a recent iron ore deal between bigger rivals BHP Billiton (BLT.L) and Rio Tinto (RIO.L).
But the options are limited for Xstrata since a hostile takeover, while not impossible, would run the risk of opposition from the South African government, a major Anglo shareholder. (Reporting by Kate Holton; Editing by Rupert Winchester)
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