Glencore seen still hungry after swallowing Xstrata

Thu May 2, 2013 1:47am EDT
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By Clara Ferreira-Marques

LONDON (Reuters) - After years of on-off talks, months of brinksmanship and often bitter negotiations, Glencore's (GLEN.L: Quote) 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 (AAL.L: Quote).

"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.   Continued...

A worker uses a mobile lift to clean the windows of the headquarters of Swiss commodities trader Glencore in Baar near Zurich April 13, 2011. REUTERS/Arnd Wiegmann