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Xstrata CFO to take role in merged Glencore group

Trevor Reid to remain CFO in merged £56 billion company

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The chief financial officer of mining company Xstrata will remain in position in the new group to be created by its merger with Glencore, the companies announced on Wednesday.

Xstrata chief financial officer Trevor Reid and chairman John Bond will retain their posts, and Glencore CEO Ivan Glasenberg, a billionaire who owns 15.8 percent of Glencore, will be president and deputy CEO of the new company.

Commodities trader Glencore agreed to buy the remaining 66 percent of mining company Xstrata for £25 billion, on top of the 34 percent it already owns, to create a company worth £56 billion. The new company will compete with heavyweights BHP Billiton and Rio Tinto.

Xstrata chief executive Mick Davis will be CEO of the enlarged Glencore. Davis told Reuters: "We have a combined entity which has much greater flexibility to be opportunistic and capture the right opportunities when they are there."

The group will have mining assets from New Caledonia to the Democratic Republic of Congo.

Glencore will issue 2.8 new shares for each Xstrata share in a deal they said was a "merger of equals".

The ratio is a 15.2 percent premium to Xstrata shareholders compared with its share price last Wednesday before word leaked out about the merger talks, a joint statement said.

Standard Life Investments, the fourth largest investor in Xstrata, said it intended to vote against the deal because it "clearly undervalues" the company's assets and future earnings potential.

"Consequently it is our intention to vote against the deal unless the merger terms for Xstrata shareholders are materially improved," David Cumming, head of equities, Standard Life Investments said in a statement.

Standard Life holds 63.6 million shares in Xstrata.

Some Xstrata shareholders had demanded a strong sweetener over the past few days but several analysts still expected them to warm to the deal, even though the premium is well below the typical 20 percent to 30 percent level in the mining sector.

Xstrata shareholders other than Glencore will hold 45 percent of the new company, to be named Glencore Xstrata International.



Xstrata CFO to take role in merged Glencore group
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