LONDON, Feb 7 (Reuters) - A combined Glencore and Xstrata would be able to undertake larger deals, Xstrata’s chief executive Mick Davis said on Tuesday.
“There’s no doubt that the combined entity has much greater financial capacity and a cleaner shareholder structure to facilitate us looking at deals which otherwise would have been challenging for us to do and therefore (it) does allow you to do larger transactions,” Davis said in a conference call with analysts and investors.
Xstrata agreed earlier on Tuesday to a takeover by commodities trading giant Glencore, in a $90 billion recommended all-share deal, the mining sector’s biggest to date.
“The advantages of scale give you the opportunity of taking perhaps more risk and therefore more opportunity in those geographies where you might have said we will be there but we will be there only within a particular size,” he added.
He also said the oil and gas sector would be attractive to the combined entity:
“That’s an area which deserves and merits attention.”