Glencore-Xstrata deal hits South African snag
Following delays in obtaining regulator approval in South Africa, commodities trader Glencore International (LON:GLEN) has announced it has extended the deadline to complete its $33 billion proposed takeover of Xstrata (LON:XTA) by a month to Jan. 31.
The company was expected to defend its case this week after South African power utility Eskom expressed worries the merger with Xstrata could affect its coal supplies.
Glencore is a major coal supplier to Eskom and one of South Africa’s main producers of the commodity. The South African government workers pension is also a big shareholder in the company.
Ventures Africa reports the parties asked for more time to prepare their defense, causing the hearing to be postponed until Jan. 18.
The deal, which has already been approved by the European Union and both companies’ shareholders, is now caught up in lengthy antitrust regulatory processes both in South Africa and China.
If successful the combined new giant would have revenues in excess of $140 billion with as much as 80% of sales earned from mining.