* Glencore files merger notification with EU
* Glencore bidding for shares in Xstrata not already owned
* Zinc set to be focus for regulators
BRUSSELS/LONDON, Oct 3 EU antitrust regulators
have set a Nov. 8 deadline to decide on whether to allow trader
Glencore's $33 billion takeover of miner Xstrata, after
months of talks which the companies hope will help avoid forced
sales or a lengthier, in-depth probe.
The European Commission said on its website on Wednesday
that it had received the notification from Glencore, filed on
Tuesday, setting the clock ticking for the regulator. Brussels
officials now have just over a month to decide whether to
approve, reject or begin a longer, "phase 2", probe into one of
the largest mining takeover deals to date.
Glencore, the world's largest diversified commodities
trader, bid in February for the roughly 66 percent of Xstrata
it does not already own, raising its offer last month
after opposition to the terms from rival shareholder Qatar.
EU regulators are expected to focus on the combined market
power of what will be the world's fourth-largest diversified
mining group. Together, the mining and trading powerhouse would
be the world's largest thermal coal exporter, the top producer
of both zinc and ferrochrome and the third largest copper miner.
Antitrust regulators could receive further representation
from bodies including Europe's influential steelmakers, worried
over market dominance in some commodities. They are, however,
expected to focus on zinc, where analysts estimate that Glencore
and Xstrata combined would hold roughly 50 percent of the
This could prompt concessions in the form of asset sales,
analysts and legal sources said, with speculation centering on
Xstrata's San Juan de Nieva refinery in Spain, the world's
largest zinc production unit, or its much smaller Nordenham
refinery in Germany.
The sale of San Juan alone would virtually halve the new
company's European market share, Jefferies analysts estimated
earlier this year.
"There is an element of who blinks first. They (Glencore and
Xstrata) will want to project confidence in an unconditional,
phase 1 clearance... but they will have a plan B in place," said
a London-based competition lawyer, who declined to be named.
"They may be the market leader, but is it enough to lead to
grave doubts and a phase 2 probe? There does at least appear to
be a potential complainant out there, in the form of Eurofer."
Eurofer, the European steel producers association, said on
Tuesday it would consider the details of the notification before
deciding whether to call for a further probe.
The European Union is one of three regulatory hoops that
Glencore has left to clear, the others being China and South
Africa. China, the world's largest consumer of commodities, has
one of the youngest and least predictable of global regulators.
China's Ministry of Commerce (MOFCOM) is one of few
regulators to impose behavioural - and not structural -
conditions on deals, meaning it has made demands around sales
procedures or prices, for example, rather than asset sales.
If remedial sales, or concessions are offered within the
first month, the EU Commission could extend its initial November
deadline by 10 days.