China has approved commodities trader Glencore’s $64 billion merger with mining group Xstrata.
The long-awaited approval from Beijing came after Glencore agreed to sell its stake in Xstrata’s copper mining project in Las Bambas, Peru to a buyer approved by Chinese authorities.
It also agreed to supply a minimum volume of copper concentrate to China for a period of eight years.
Separately, Xstrata announced that its CEO Mick Davis would not take the same role at the combined group for six months as had previously been intended – allowing Glencore’s Ivan Glasenberg to take control of the company straight away.
Mr Davis will “step down from Xstrata plc upon completion of the merger, currently expected to be 2 May 2013,” Xstrata said in a statement.
He will receive a £4.6 million payment on top of the £9.6 million he was already due as part of the deal.
He will act as a consultant to the combined group until June 30 to assist with an orderly handover.
“I look back on the past eleven years at Xstrata with enormous satisfaction. I have had the great pleasure and privilege of working with a talented and committed group of leaders. Together we were able to build a $50 billion global company from a $500 million minnow, delivering significant returns to our shareholders in the process,” Davis said. “At the same time we created a unique culture that empowered individuals to perform and identify opportunities to create value, while making a positive and lasting contribution to the communities and countries in which we work.”
The merger will create one of the world’s biggest metals and commodities firms.
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