DERA informed - Glencore plans to acquire Xstrata

The DERA announces: "could The proposed acquisition of the mining company Xstrata by commodities trader Glencore International in Switzerland, the fifth-largest mining company for mineral raw materials originate." Below, the German Mineral Resources Agency (DERA) rated in the Federal Institute for Geosciences and Natural Resources (BGR), the impact of the merger on the global commodity markets.


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Glencore belong to the value of mining production of mineral resources to the thirty largest mining company in the world. The "global player" Xstrata counts loudly DREA analysis of the ten largest mining companies. After a merger, the merged entity. With a global share of about 2% of the value of globally funded mineral resources fifth-largest mining group behind Brazil's Vale SA, Australia's BHP Billiton Group, and British companies Rio Tinto Plc and Anglo American Plc
In May 2010, according to press reports, was known georden that Glencore seeks a merger with Xstrata. Originally founded as a "Marc Rich and Co" and in 1993 was renamed Glencore in May 2011, the company went public. 2011 Glencore has earned a net profit of four billion dollars, the annual turnover was $ 186 billion. According to sales figures Glencore was in 2011 the world number one in the mines, before ArcelorMittal and BHP Billiton Group.
According DERA is Glencore is specialized in the trade of mineral raw materials, energy resources and agricultural commodities. The primary mining Glencore was heavily involved in the mining of cobalt, zinc, tin, lead, copper, silver and gold. In the mining sector Glencore especially in South America, the former Soviet Union and Australia was operating. Major mines are located, the DREA further. Kazakhstan, Australia, the Democratic Republic of Congo, Peru, Bolivia, Argentina and Zambia In cobalt, zinc, tin and lead Glencore belongs among the ten largest mining companies outside China.
Glencore already consider to Xstrata a share of about 34%. The history of the mining company Xstrata Plc was founded in 1926 went back to the Südelektra AG. In 1999, the Südelektra Holding AG, a former subsidiary of Glencore International AG, renamed Xstrata AG. The IPO in 2002 the Xstrata Plc.
As the DREA mittieelt, Xstrata posted 2011 net income of $ 5.9 billion in annual sales of $ 33.8 billion. The mining company was a major world producer of coal, zinc, lead, chromite, copper, nickel, silver, platinum group elements, molybdenum, gold, vanadium and magnesium.
After a merger, the new entity would have in mine production of the metals zinc, lead, cobalt, silver, chromite, nickel, copper and a leading position.
Mergers generally involve the risk of increasing market concentration and the ability to exercise market power strengthens. The concentration of a market can be quantified by the Herfindahl-Hirschman Index. It is calculated as the sum of the squared shares of a market segment. Values ​​below 1500 are considered safe between 1500 and 2500 prior to a moderate degree of concentration. If the index is above 2500 and has an association, an increase of more than 200 points in the effect of the market is concentrated as a concern.
China is in a range of commodities inter alia of lead and zinc, the world's largest producer. On the share, the most state-controlled Chinese companies with global production there is often insufficient data, the cumulative information of the companies of the world mine production in the following tables covered for these commodities from the market therefore incomplete. The level of concentration of primary producers (with only incomplete share of Chinese companies), be safe, with few exceptions. This also applied to the zinc, lead, chromite and cobalt market, which is the merger of Glencore and Xstrata most affected.
The degree of concentration is changing with all raw materials through the merger only marginally. "We expect that other companies neither the access to raw materials will be more difficult, yet have significant impact on the takeover market prices continue to be," said DERA commodities expert Maren Liedtke.