Swiss mining company Xstrata has finally agreed to sell out to its local rival Glencore, digging its heels in for an improved 25.6 billion euro offer. However the deal also keeps a controversial retention package of 175 million euros, ensuring a bonanza for 70 of Xstrata’s top bosses and a guaranteed two more years on the job.
The deal creates a mining and trading powerhouse with combined revenues of nearly 140 billion, and profits of 7.5 billion. It is one of the largest-ever mining deals, and has taken nearly eight months to finalise. Yet it could still be derailed.
Qatar’s sovereign wealth fund owns over 12% of Xstrata and has been unhappy with the takeover. Glencore’s Ivan Glasenberg will run the group, but Xstrata executives will be in a majority in the boardroom, as they are responsible for the major projects in the pipeline.