The merger plans by international miner Xstrata PLC and global commodities trader Glencore was meeting early shareholder resistance who argue the $88 billion (U.S.) deal undervalues their shares.
Glencore, which has a 34.4 per cent stake in Xstrata, would create a combined company with a market value of $90 billion (U.S.).
The so-called “merger of equals' will create a new company positioned to be a global mining heavyweight and exporter of power plant coal and miner of zinc.
The new company will be called Glencore Xstrata International PLC.
Xstrata Chief Executive Mick Davis will become chief executive of the new group, with Glencore CEO Ivan Glasenberg becoming president.
The fourth largest Xstrata investor, Standard Life, said it will be opposing the deal.
Shareholders get to vote in April. The deal needs 75 per cent approval. Glencore is barred from voting.
Under the terms of the deal, Xstrata said investors would receive 2.8 Glencore shares for every Xstrata share.
The two companies are looking to combine to take advantage of a broader range of merger and acquisition opportunities.
Under the proposed new structure, Xstrata will handling all the operating assets, while Glencore will take care of product marketing.
The combined company will be listed on the London and Hong Kong stock exchanges.
Regulatory approval could arrive by this year's third quarter if shareholders accept the deal.
.jpeg;w=120;h=80;mode=crop)
