King & Wood Mallesons has acted on a game-changing deal in the mining sector, advising on Xstrata plc’s all-share merger with Glencore International plc.

Upon completion, the merger will be the largest of its kind in the mining industry to date and the largest M&A deal (in money terms) worldwide this year.

Under the deal, Glencore, the world’s largest commodities trading company, will acquire all of the remaining 65% shareholding in Xstrata which it does not currently own.  Glencore will offer 2.8 new shares to each shareholder in Xstrata, representing a 15.2% premium to Xstrata shareholders

The new entity, to be called Glencore Xstrata, will be one of the world’s largest diversified mining houses and have a combined market capitalisation of US$90 billion spanning mining, agriculture and trading.

King & Wood Mallesons acted for both Glencore and Xstrata on the merger by agreement by both parties.  The transaction involved negotiations with deal teams across the world to secure approval from a number of regulatory bodies including, in Australia, the Foreign Investments Review Board (FIRB) and the Australian Competition and Consumer Commission.  

The King & Wood Mallesons team was led by M&A partner Nicholas Pappas, who continued his longstanding relationship with Xstrata and Glencore.  Nicholas was assisted by partner Wayne Leech who advised on anti-trust issues and partner Andrew Gray who advised on employment issues.  Special counsel Malcolm Brennan advised on the FIRB-related aspects and partner Frank Brody provided stamp duty advice.