Swiss commodities trader Glencore International Plc. (GLEN.L, GLNCY.PK, GLCNF.PK) gained approval from Chinese authorities for its proposed takeover of Anglo-Swiss miner Xstrata Plc. (XTA.L, XSRAY.PK, XSRAF.PK), Bloomberg reported Tuesday, citing people with knowledge of the matter. Following the reported clearance of the final regulatory hurdle in its $30 billion merger deal, shares of both Glencore and Xstrata increased more than 5 percent on the London Stock Exchange.
As per the report, China's Ministry of Commerce agreed to the takeover and an announcement is expected today or tomorrow.
In early April, Glencore and Xstrata once again extended the long stop date for their proposed merger, citing the pending regulatory decision from China. Glencore had said earlier that it has had constructive discussions with the Ministry of Commerce of the People's Republic of China or MOFCOM, and that these discussions were in their final stages.
Glencore Chief Executive Officer Ivan Glasenberg said earlier that China's competition regulator focused its review on the new company's influence in the copper-concentrate market.
The deal received clearance from South Africa's antitrust regulator in January and the European Union in November.
It was in early February last year that Xstrata agreed for an all-share merger of equals with Glencore, to create a $90 billion natural resources group to be called Glencore Xstrata International Plc. The deal had won the approval of both companies' shareholders on November 20.
The companies have been going on extending the merger closure timing, citing ongoing regulatory processes in various operating countries.
Following the reported regulatory approval in China, completion of the merger now remains conditional upon completion of the Xstrata court process, and Glencore giving effect to the commitments required by the European Commission.
In London, Glencore shares are currently trading at 337.95 pence, up 16.85 pence or 5.25 percent, and Xstrata shares are at 1,025.50 pence, up 59.20 pence or 6.13 percent.
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