Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE WORLD THIS WEEK

The World This Week - 01 August 2014 (part 2)

Read more

MEDIAWATCH

Coverage of Gaza in the Israeli media

Read more

REPORTERS

1914-1918: The Depths of Hell

Read more

THE WORLD THIS WEEK

The World This Week - 01 August 2014

Read more

THE INTERVIEW

Exclusive: Israel's US ambassador speaks to FRANCE 24

Read more

#THE 51%

World War One: The war that changed women’s lives

Read more

FRANCE IN FOCUS

Ségolène Royal goes for green

Read more

THE OBSERVERS

A look back at some of the Observers' best stories

Read more

DEBATE

Argentina Defaults: Kirchner Cries Foul Over 'Vulture Funds' (part 2)

Read more

  • Hamas denies capturing Israeli soldier as Gaza truce lies in tatters

    Read more

  • Scores killed in China factory explosion

    Read more

  • Exclusive: Israel's US ambassador speaks to FRANCE 24

    Read more

  • Police 'chokehold' caused NYC death, coroner rules

    Read more

  • French most keen to erase their online footprint, says Google

    Read more

  • Air France ground workers to strike on August 2

    Read more

  • Rogue general denies Islamist seizure of Benghazi

    Read more

  • Ugandan court strikes down anti-gay legislation

    Read more

  • 1914-1918: The Depths of Hell

    Read more

  • Regional summit to tackle deadly Ebola outbreak

    Read more

  • French hospital to open wine bar for terminally ill patients

    Read more

  • Video: Tipping is dying out in French café culture

    Read more

  • €2.5 million in cocaine ‘disappears’ from Paris police HQ

    Read more

  • Appeal court keeps French rogue trader Kerviel in jail

    Read more

  • Interactive: France’s new plan to counter jihadism in Africa

    Read more

  • Ukrainian army suffers losses in separatist attack

    Read more

Business

Anglo American rejects tie-up with rival Xstrata

Text by NEWS WIRES

Latest update : 2009-06-23

British-South African mining giant Anglo American announced on Monday that it has rejected a merger bid from its Swiss rival Xstrata, saying that the terms were "totally unacceptable". The merger would have created the world's biggest mining company.

AFP - London-based mining group Anglo American rejected a merger bid by its Swiss rival Xstrata on Monday, snubbing a move that could have forged the two into one of the world's biggest miners.

"The strategic case for the combination is unattractive for Anglo American shareholders," Anglo American said in a statement. "Irrespective of this lack of strategic merit, the terms proposed by Xstrata were totally unacceptable."

The potential tie-up between Xstrata and British-South African firm Anglo American was the latest sign of consolidation pressure in the sector after the collapse of a deal by Rio Tinto with China.

The price of Anglo American shares had soared to close 4.62 percent higher in London trading on Monday after Xstrata said at the weekend that it had approached its rival about a merger.

Anglo American is worth 35 billion US dollars (25 billion euros) and Xstrata 33 billion dollars.

A merger could have created a company worth more than Rio Tinto, which earlier this month cancelled a controversial tie-up with China's Chinalco in favour of a joint venture with the world's biggest miner BHP Billiton.

On Sunday, Xstrata had said it was seeking a possible "merger of equals," adding that such a move would be "highly compelling" and "significantly enhance shareholder returns."

The activities of the two companies overlap in many areas. Both own coal assets in Australia and South Africa and there had been potential for savings across their copper mining operations.

But Anglo American said in its statement that "a combination with Xstrata would profoundly impact the nature of the Group's portfolio."

A merger risked "significantly diluting Anglo American's unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc," the company said.

Anglo American is cutting 19,000 jobs this year after posting a 29-percent fall in 2008 net earnings because of sliding demand for raw materials amid the world's worst economic downturn since the 1930s.

The group has also come in for much criticism from shareholders after chief executive Cynthia Carroll decided against paying a dividend for 2008.

Carroll, who has headed the Anglo-South African firm since March 2007, has also reduced Anglo American's 2009 investment programme by half to 4.5 billion US dollars because of global economic uncertainty.

Earlier this month, Rio Tinto decided against allowing Chinese state-owned aluminium giant Chinalco to invest 19.5 billion dollars in the Anglo-Australian firm.

Rio has been searching for extra funds after its purchase last year of Canadian aluminium group Alcan, which saddled the company with some 38 billion dollars of debt.

But Chinalco's emergence as a suitor sparked a political firestorm over ownership of Australian assets, leaving the Australian government with a difficult choice -- to risk angering either its electorate or China, a key market.

Instead, Rio unveiled an iron ore joint venture with BHP Billiton and a rights issue worth 15.2 billion US dollars. BHP meanwhile abandoned a hostile takeover bid for Rio last November.

Date created : 2009-06-23

COMMENT(S)