Glencore wins conditional EU okay for Xstrata deal
BRUSSELS Nov 22 (Reuters) - Commodity trader Glencore clinched EU regulatory approval for its $31 billion bid for miner Xstrata on Thursday after agreeing to cut its European Union zinc market share to below 40 percent.
The world's largest diversified commodities trader must scrap an exclusive zinc sales deal and sell its 7.8 percent stake in world No. 1 zinc producer Nyrstar, the European Commission said in a statement.
"The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanisers and carmakers can continue to produce valuable consumer goods at low prices and good quality," EU Competition Commissioner Joaquin Almunia said.
The combined entity, including the Nyrstar agreement, would have had a 50-percent share of the zinc market in Europe. Antitrust authorities typically worry when market clout exceeds 40 percent.
Ending the Nyrstar sales deal would free up 350,000 tonnes, 16 percent of Europe's zinc market, and cut the combined group's 50-percent share to below 40 percent.
The Commission said Glencore also pledged not to buy, either directly or indirectly, zinc from Nyrstar for 10 years and will not take any action to restrict the zinc producer's ability to compete with it in Europe during that period.