* Glencore Xstrata deal completes on May 2
* New company shares begin trading on May 3
* Glasenberg seen eyeing more deals, Anglo American
* Detail on management, synergies expected on May 3
By Clara Ferreira-Marques
LONDON, May 2 After years of on-off talks,
months of brinksmanship and often bitter negotiations,
Glencore's head Ivan Glasenberg gets to complete the
$30 billion acquisition of Xstrata on Thursday, the mining
industry's biggest takeover yet.
But even as the champagne pops, investors and rivals are
asking where the highly ambitious South African will look for
his next deal. Many are already pointing to vulnerable or
undervalued rivals, including Anglo American.
"This is not the endgame, this is the beginning," analyst
Chris LaFemina at Jefferies said.
"Glencore wants to buy when no one else wants to buy, and
what no one else wants to buy - that is when no one else is
bidding and you can buy things cheap. That time is clearly now."
Xstrata began just over a decade ago with a collection of
zinc and ferroalloy assets and coal mines bought from Glencore,
building itself up under now departing chief executive Mick
Davis into one of the world's largest diversified miners.
The combination of commodities trader Glencore and producer
Xstrata, long Glasenberg's ambition, creates a mining and
trading powerhouse with over 100 mines around the world, some
130,000 employees, and an oil division with more ships than
Britain's Royal Navy.
It will be the largest exporter of thermal coal and the
third-largest producer of mined copper.
But South African-born Glasenberg, who has rattled rivals
with forthright comments, such as recently telling them they had
"screwed up", is not done.
"In terms of hunger, ambition, I can't see any reason why
Ivan Glasenberg's ambition has been diminished as a consequence
of this deal. He has a greater awareness of his ability to get
deals of this scale done," said analyst Paul Gait at Sanford
Bernstein in London.
Anglo American, one of the most frequently quoted of
Glencore's larger potential targets, has been in team
Glasenberg's sights before. He was a key shareholder when
Xstrata made a move for Anglo in 2009, only to be rebuffed.
Anglo has now set itself on a turnaround path with a new
CEO, but is still battling to overcome the impact of overruns at
its $8.8 billion Minas-Rio iron ore project in Brazil and an
unprecedented squeeze in platinum, where it faces weak prices,
high costs and combative unions. Its shares trade at discount to
the sum of the parts that some analysts put at 50 percent.
"I still see Anglo as vulnerable, and I see Glencore as a
natural buyer for it," Gait said.
Glencore has already dismissed concerns that regulatory
scrutiny of its deal with Xstrata - and remedies imposed by both
the European Union and China - could stop other deals.
"There are companies, definitely larger companies, Glencore
can continue to look at," Glasenberg said in March.
Anglo is also unlikely to be alone. Glencore's sprawling
network of traders and its crucial on-the-ground knowledge will
continue to throw up deals, from logistics buys to oil and mines
- and with majors retreating and smaller players short of cash,
Glasenberg may face little competition.
Investors, for now at least, are supportive.
"They clearly need to bed down Xstrata and if the strong
dollar persists, then commodity prices will remain subdued and
so will valuations ... they can sit back and wait," Mark Holden,
senior fund manager at Ignis Asset Management, said. "That
doesn't mean that if an opportunistic deal came up, that they
wouldn't try to get involved - and so they should."
But it is Glasenberg-the-investor's pursuit of returns for
shareholders at the expense of location, commodity or any other
consideration that is seen likely to continue to impact a sector
where investor demands for better returns and use of cash have
led to a wave of change at the top.
Of the world's six biggest miners there is only one where
there has not been a change of chief executive in the past two
years - Glencore, where Glasenberg is also the firm's biggest
"He acts as more of a catalyst for change, given his
personality and his take on the industry, than just the weight
of the assets would suggest," Gait said.
Yet integrating Xstrata, a $46 billion company with a
different corporate culture and assets across the world, will
not be plain sailing for Glencore. Analysts say there is much
attention on Glencore's ability to combine the companies while
beating the synergies target of $500 million.
All but one of Xstrata's divisional chiefs have already left
including Xstrata's head of copper - a metal which accounted for
more than half the miner's profit last year. Glencore has
shrugged off fears of an exodus at this level, saying it is more
concerned with keeping managers on the ground.
But the bitterness left by its battle to win Xstrata was
evident in a statement announcing the immediate departure of
Mick Davis which carefully detailed the terms for his continued
use of computers, office space and a plane.
According to industry sources Davis is now expected to set
up a privately backed investment venture and could take former
colleagues with him.
That team has also left gaps in the combined group's board,
some of which Glencore could fill this week. Among the key spots
open is that of chairman, left vacant after Xstrata's chairman
John Bond, who had been due to take the combined group role,
quit after a row over retention packages for Xstrata bosses.
The combined group's shares begin trading on May 3.