Glencore sets EU antitrust clock ticking: sources

Tue Oct 2, 2012 4:46pm EDT
 
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By Clara Ferreira-Marques

LONDON (Reuters) - Trader Glencore (GLEN.L: Quote) has formally notified the European Commission of its $33 billion plan to take over miner Xstrata XTA.L, sources familiar with the matter said, after months of preliminary talks designed to pave the way for a swift approval.

Once the notification has been acknowledged by the commission, the European antitrust regulator has 25 days to decide whether to approve, reject or begin an in-depth probe into a plan to create the world's fourth largest miner.

The sources, which said official news of the notification could be made public on Wednesday, did not specify whether any "remedial" sales, or concessions, were being offered by the two sides to appease the European Union's competition regulator.

Analysts, though, have pointed to potential disposals of assets, particularly in zinc, used in manufacturing and to prevent corrosion, and which is likely to be an area of focus for the European regulator. There could also be reviews of marketing agreements for the metal, some said.

After lengthy "pre-notification" negotiations in advance of Tuesday's official filing, Glencore and Xstrata are widely seen to be targeting a green light from Brussels without a probe extending longer than the first 25 days.

The European Union is not the final regulatory hurdle for Glencore and Xstrata to clear, but the EU process has been keenly watched, as the regulator is expected to set the tone. Beyond Brussels, the two still need get a nod from China's Ministry of Commerce (MOFCOM), the newest and least predictable global regulator.

Glencore, the world's largest diversified commodities trader, made its bid for Xstrata in February. It announced weeks later that it would notify the EU Commission, despite a long-standing 34-percent stake in the miner. Few, though, had expected the commission to pass on the opportunity to lift the lid on one of the largest takeover deals in the mining sector.

The notification, which sets the EU regulatory clock ticking, had initially been expected as far back as April, but has been delayed by drawn-out talks, by uncertainty over the deal itself after opposition from Xstrata's second-largest shareholder Qatar, and by the European summer break.   Continued...

 
Combination of file photos showing the logo of Glencore in front of the company's headquarters in the Swiss town of Baar (R) September 7, 2012, and the logo of Swiss mining company Xstrata at their headquaters in Zug March 26, 2008. REUTERS/Michael Buholzer/Files