By Michael Northcott Friday, 18 January 2013

Deja vu all over again as Glenstrata deadline pushed back

We're getting bored now. The feted mega-merger between mining giants Glencore and Xstrata has been delayed yet again, this time over competition regulation issues.

Never underestimate the propensity of giant companies to move slower than an early-January commuter train. That’s right, folks, the saga of Glencore and Xstrata’s love affair has hit yet another stumbling block: antitrust regulatory processes in South Africa and China.

Nope, doesn’t really mean all that much to us either, but the six-week extension means that far from completing the deal by January 31st, the two parties will not have tied the knot until March 15th. Bearing in mind that the January deadline was itself an extension on the original year-end-2012 deadline, this is pretty good going.

In a statement, Glencore said: ‘The parties have agreed a new long stop date in order to give them the flexibility to complete the merger after the release of the preliminary results.’ The main culprit is Glencore itself, which, whilst it has received the go-ahead from European authorities, is still waiting for competition bosses to OK it in China and South Africa.

The deal was finally voted through back in November, after months and months of to-and-fro. In mid-2012, it looked as though the union might come off the rails altogether because the Qataris (shareholder in Xstrata) suddenly demanded more lucrative terms, bang in the middle of existing negotiations. This prompted Glencore’s chief, Ivan Glasenberg, to play hardball, claiming that the merger was not a ‘must-do’ deal for his company. 

Still, the Qataris finally softened after an ‘improved exchange ratio of 3.05 new Glencore shares for every one existing Xstrata share’ was secured. Again, jargon up to their eyeballs, but you get the gist. 

If the delays go on much longer, however, we really are going to nod off…

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