Belfast Telegraph

Investors reject plan to merge top mining companies

By Jamie Grierson and Graeme Evans

A multi-billion-pound tie-up set to create the world's fourth largest natural resources firm has met instant criticism as two major UK investors said they would vote against the move.

Mining heavyweights Glencore and Xstrata want to merge and form a company worth $90bn (£57bn) - but must secure the backing of 75% of Xstrata and Glencore shareholders in separate votes, as well as regulatory approval, to proceed.

Edinburgh-based Standard Life Investments, which has a 2.2% holding in Xstrata, and Schroders came forward within hours of the announcement to express concerns over the level of Xstrata's stake (45%) in the proposed business and refused to back the deal.

David Cumming, of Standard Life Investments, said the deal undervalues Xstrata's assets and added: "It is our intention to vote against the deal unless the merger terms for Xstrata shareholders are materially improved."

Xstrata and Glencore - among the top 20 firms on the London stock market - will have operations in 33 countries and should be better able to compete against bigger rivals BHP Billiton and Rio Tinto if the merger goes ahead.

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