Xstrata Merger Spurned By Anglo-American
Stock quotes in this article:
AAUK
(Update: Adds detail regarding Anglo-American's process of rejecting Xstrata's bid.)
Anglo-American(AAUK Quote) has rejected a merger offer from global mining rival Xstrata. In spurning the proposal, Anglo-American, the world's biggest platinum extractor, argued in a strongly worded press release that combining with Xstrata would only serve to expose its business to what it perceives to be the lower-growth nickel and zinc markets. In addition to platinum, Anglo-American derives much of its revenue from diamond mining. Earlier reports that Anglo's board had commenced a merger dialogue with Xstrata were premature. Anglo-American also said that its own recent cost-cutting measures -- one of the rationales behind Xstrata's merger bid -- were strong enough to add to shareholder value without any dealmaking. "Irrespective of this lack of strategic merit, the terms proposed by Xstrata were totally unacceptable," Anglo-American said in its statement. The Australian newspaper earlier reported that, though Anglo-American's board was not tempted by Xstrasa's offer, it nevertheless sought out the opinions of shareholders as early as "a few days ago." Obviously, those investors ultimately sided with the Anglo-American board. The rejection is Xstrata's second in as many years. In 2008, the company failed in a hostile bid to acquire another large platinum miner, South Africa's Lonmin(LNMIY Quote).- Loading Comments...
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