Xstrata & Anglo American merger

Xstrata Plc, the world's largest thermal coal exporter, confirmed Anglo American's announcement today that Xstrata has sent a written proposal to the board of Anglo American seeking their consideration of a merger of equals of the two mining giants. 

Xstrata believes a merger of these two world-class companies with complementary assets is highly compelling. 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. Xstrata has already quantified substantial operational synergies from the combination that are not available to either company operating alone.

"There is, however, no assurance that any transaction will be forthcoming from Xstrata’s proposal," the company said in a statement sent to Yosefardi.com on Sunday, June 21

The merger, if approved, would create a combined market capitalization of US$68 billion. Xstrata and Anglo American have their shares slashed 10.4% and 6.1% respectively last week. They gained 6.41% and 4.37% respectively this year, underperformed to bigger mining stocks like BHP (+17%) or Rio Tinto (+37%).

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