(PTI): The Swiss-based mining giant Xstrata is going ahead with a plan to form a potential 54 billion dollar merger with its rival Anglo American.
Xstrata said in a statement that the Swiss metals company has proposed a “merger of equals” to create a mining group that would rival BHP Billiton Ltd., the world’s largest miner.
“The combination would create a premier portfolio of operations diversified across multiple commodities and geographies, with enhanced scale and financial flexibility to fund future growth,” the group said.
The move, if successful, could stir up a wave of mergers and acquisitions in the international mining industry.
Xstrata says its offer would provide “enhanced scale and financial flexibility to fund future growth”.
Xstrata’s chief executive Mick Davis proposed an opening of talks in a letter to Anglo American’s board last week, but the London-based miner said talks were “at a very preliminary stage and there is no certainty that any transaction will be forthcoming”.
The Swiss-based miner is interested in combining with the British company, however, Anglo American “does not see enough benefits” in the bid.
Amid Xstrata’s discussions, Brazilian company, Vale, and other miners such as BHP Billiton have now signaled their eagerness to take over Anglo American.
Tags: Anglo American, Merger, Swiss-based mining giant, Xstrata