TIDMGLEN TIDMXTA
RNS Number : 5493N
Glencore International PLC
01 October 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN
PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
NEWS RELEASE
RECOMMENDED ALL-SHARE MERGER OF EQUALS OF
GLENCORE INTERNATIONAL PLC AND XSTRATA PLC
FINAL TERMS
1 October 2012
SUMMARY
The Glencore Directors and the Independent Xstrata Non-Executive
Directors announce that they have reached agreement on the final
terms of a revised recommended all-share merger of equals, on the
basis set out in this announcement.
-- The strategic rationale for the Merger remains compelling and
the transaction has the potential to create superior value for
Xstrata Shareholders
-- The increased merger ratio of 3.05 New Glencore Shares for
every Xstrata Share represents an 17.6 per cent. premium over the
ratio of 2.59 implied by undisturbed closing share prices on 1
February 2012, and is 25.5 per cent. higher than the ratio of 2.43,
being the average of the ratios implied by the middle market
closing share prices of the two companies between 3 September 2012
and 6 September 2012, the latter being the last business day prior
to the announcement by Xstrata of the revised proposal from
Glencore
-- The original board structure remains unchanged, except that
Mick Davis will become CEO of the Combined Group for a period of
six months from the Effective Date. Upon his departure, Ivan
Glasenberg will become CEO of the Combined Group. A current Xstrata
Group operational executive will replace Mick Davis upon his
departure as an executive director of the board of the Combined
Entity, to preserve the majority of Xstrata directors on the
board
-- The Independent Xstrata Non-Executive Directors continue to
believe the proposed exchange ratio, governance structure and the
retention of key Xstrata managers through the Revised Management
Incentive Arrangements are essential elements of the Merger
-- The Merger will be implemented via a Court-sanctioned scheme
of arrangement to safeguard the requirement that a significant
majority of Xstrata Shareholders approve the Merger and to ensure a
binary outcome
-- In response to Xstrata Shareholder feedback, the Independent
Xstrata Non-Executive Directors have determined that the New Scheme
will no longer be conditional on the approval of the Revised
Management Incentive Arrangements, meaning that the Merger could
proceed even if the Revised Management Incentive Arrangements are
not approved. Accordingly, the Independent Xstrata Non-Executive
Directors, with the agreement of Glencore, propose that under the
New Scheme, eligible Xstrata Shareholders will vote on two
resolutions at the New Court Meeting as follows:
1. To approve the New Scheme subject to the resolution to
approve the Revised Management Incentive Arrangements to be put to
the Further Xstrata General Meeting being passed. The Independent
Xstrata Non-Executive Directors intend to recommend unanimously
that eligible Xstrata Shareholders vote in favour of only this
resolution at the New Court Meeting; and
2. To approve the New Scheme subject to the resolution to
approve the Revised Management Incentive Arrangements to be put to
the Further Xstrata General Meeting not being passed
-- Eligible Xstrata Shareholders should vote on both New Scheme
resolutions, which in each case require approval by 75 per cent. by
value and a majority by number of eligible Xstrata Shareholders
voting (in person or by proxy)
-- Eligible Xstrata Shareholders should also vote on the
resolutions to be put to the Further Xstrata General Meeting, one
of which will be the ordinary resolution to approve the Revised
Management Incentive Arrangements
-- The outcome of the vote on the ordinary resolution to approve
the Revised Management Incentive Arrangements will determine which
of the two New Scheme resolutions will be disregarded. The result
of the vote on the remaining resolution to approve the New Scheme
will then determine whether or not the Merger proceeds. Further
details are set out in paragraph 13 of this announcement
-- Mick Davis will no longer participate in the Revised
Management Incentive Arrangements and will receive only his current
contractual entitlement upon termination of his existing Xstrata
service contract. The contracts of employment for all other members
of Xstrata's Management and Xstrata Senior Employees will be
amended to reflect the fact that Mick Davis will cease to be CEO of
the Combined Group and that this will no longer constitute an
amendment to the agreed governance structure
The Independent Xstrata Non-Executive Directors, who have been
so advised by each of the Xstrata Financial Advisers, consider the
terms of the Merger to be fair and reasonable, but only if the
Revised Management Incentive Arrangement Resolution is passed at
the Further Xstrata General Meeting. In providing its advice, each
of the Xstrata Financial Advisers has taken into account the
commercial assessments of the Independent Xstrata Non-Executive
Directors.
Accordingly, the Independent Xstrata Non-Executive Directors
intend unanimously to recommend eligible Xstrata Shareholders to
vote to approve: (i) the New Scheme, but only if the Revised
Management Incentive Arrangements Resolution is passed at the
Further Xstrata General Meeting; and (ii) the Revised Management
Incentive Arrangements (in each case, as the Independent Xstrata
Non-Executive Directors who hold or are beneficially entitled to
Xstrata Shares have irrevocably undertaken to do in respect of
their own Xstrata Shares (representing approximately 0.1 per cent.
of the issued ordinary share capital of Xstrata)).
Sir John Bond, Xstrata plc non-executive Chairman said:
"The Independent Xstrata Non-Executive Directors have carefully
considered the terms of the revised Glencore proposal to assess the
value proposition and ensure safeguards and an appropriate
governance structure are in place for Xstrata Shareholders, in view
of Glencore's condition that Mick Davis will step down as CEO of
the Combined Group six months after the Merger closing. In doing
so, we have consulted with our major shareholders and taken their
views into account. We have preserved the original board structure,
including after Mick Davis's departure and the board has received
satisfactory assurances on the governance, future strategy and
management of the Combined Group. The scheme of arrangement
structure remains a critical element of the transaction, ensuring a
definitive outcome and requiring a significant majority of
non-Glencore Xstrata Shareholders to approve the Merger.
"Without the ability to retain key Xstrata managers to run the
Combined Group's mining operations through the Revised Management
Incentive Arrangements, the Independent Xstrata Non-Executive
Directors believe that the value proposition of the Combined Entity
is at risk. This view was reaffirmed by major shareholders, in
particular in the light of the change of CEO and remains the
rationale for retention arrangements. Nonetheless, some other
shareholders remain opposed either to the principle of retention
payments or to the originally proposed inter-conditional nature of
the Merger resolutions.
"Accordingly, we have decided to decouple the resolutions to
approve the Merger from the resolution to approve the Revised
Management Incentive Arrangements. This will, we believe, enable
shareholders to vote in line with their convictions in respect of
retention arrangements, without influencing their voting intention
on the New Scheme. Importantly, shareholders who would only support
the Merger if key Xstrata personnel can be retained are able to
approve the New Scheme only if retention arrangements are approved
by shareholders. The Independent Xstrata Non-Executive Directors
intend unanimously to recommend that eligible Xstrata Shareholders
vote in favour of the resolution to approve the Revised Management
Incentive Arrangements and in favour of the Merger but only if the
Revised Management Incentive Arrangements are approved."
Mick Davis, Xstrata plc Chief Executive Officer commented:
"The strategic rationale for combining Xstrata and Glencore
remains highly compelling. A merger will fuse the respective
strengths of the two companies into a unique, vertically integrated
natural resources group. It will also resolve Xstrata's ownership
structure in a way that I believe will create superior shareholder
value as part of a larger, more diverse company with an enhanced
ability to grow and create value for its owners.
"My objective during my time as CEO of the Combined Group will
be to preserve and enhance the value Xstrata's management team has
created over the past ten years through a well-planned integration
process and to lay down the foundations for the Combined Group's
success over many decades to come."
Ivan Glasenberg, Glencore International plc Chief Executive
Officer, said:
"We are pleased that Xstrata's Independent Non-Executive
Directors have recommended our revised terms which offer Xstrata
shareholders a significant premium.
"We have always been in favour of the proposed retention
arrangements to incentivise key Xstrata employees. Their commitment
is vital as we look to capture the full synergy and value creation
benefits of the transaction and realise the potential of both
companies' strong long-term organic growth plans.
"The amended proposed voting structure should allow Xstrata
shareholders to fully express their own views on the proposed
structure of the transaction."
Simon Murray, Glencore International plc non-executive Chairman,
commented:
"The Glencore Board fully supports the strategic rationale for
the merger with Xstrata, which will strengthen the existing strong
relationship between these two leaders in the commodities
industry.
"The complementary focus, combined industrial assets, logistics
and marketing capabilities of these two companies will create a
larger, more diversified player with excellent prospects for growth
through the cycle. Together the Combined Group will have the scale
to play a key role in meeting the growing global demand for
commodities whilst helping resource holding countries create value
from their natural endowments."
The Glencore Directors consider the Merger to be in the best
interests of Glencore Shareholders taken as a whole. Accordingly,
the Glencore Directors intend unanimously to recommend Glencore
Shareholders to vote in favour of the resolution to be proposed at
the Glencore General Meeting to approve the Merger and related
resolutions as the Glencore Directors who hold or are beneficially
entitled to Glencore Shares have irrevocably undertaken to do in
respect of their own Glencore Shares (representing approximately
16.9 per cent. of the issued ordinary share capital of
Glencore).
The revised terms of the Merger set out in this announcement are
final. The full detail of these revised terms will be set out in
the New Scheme Document to be posted and made available to all
eligible Xstrata Shareholders during October 2012.
Timing
It is expected that the New Scheme Document, containing further
information about the Merger and notices of the New Court Meeting
and Further Xstrata General Meeting, together with the Further
Forms of Proxy, will be posted and made available to Xstrata
Shareholders during October 2012. It is also expected that the New
Scheme will then become effective before 31 December 2012, subject
to the satisfaction of the Conditions and certain further terms set
out in Appendix 1 to this announcement.
It is also expected that, in accordance with the Prospectus
Rules, Glencore will publish further documentation containing
updated information about the New Glencore Shares during October
2012.
It is further expected that Glencore will formally notify the
European Commission of the Merger shortly. The processes in respect
of South Africa and China are ongoing. It is anticipated that the
requisite approvals will be obtained before 31 December 2012.
The Further Glencore Circular will include full details of the
Merger, together with the notice of the Glencore General Meeting at
which the relevant resolutions will be proposed for the approval of
the Merger by Glencore Shareholders, including as a "Class 1"
transaction under the Listing Rules. The Further Glencore Circular
is expected to be posted to Glencore Shareholders at or around the
same time as the New Scheme Document is posted to Xstrata
Shareholders.
This summary should be read in conjunction with, and is subject
to, the full text of the following announcement (including its
Appendices). The Merger will be subject to the Conditions and
certain further terms set out in Appendix 1 and to the full terms
and conditions to be set out in the New Scheme Document and the
Further Forms of Proxy. Appendix 2 contains the sources and bases
of certain information contained in this summary and the following
announcement. Appendix 3 contains details of the irrevocable
undertakings received by Xstrata and Glencore. Appendix 4 contains
the definitions of certain terms used in this summary and the
following announcement.
Contacts
Glencore Xstrata
Paul Smith (Investors) Charles Watenphul (Media) Martin Fewings (Investors) Claire Divver (Media)
+41 (0) 41 709 24 87 +41 (0) 41 709 26 79 +44 20 7968 2893 +44 207968 2871
paul.smith charles.watenphul mfewings cdivver
@glencore.com @glencore.com @xstrata.com @xstrata.com
Elisa Morniroli (Investors) Caroline Yates (Investors) Alison Flynn
+41 (0) 41 709 2818 +44 20 7968 2878 +4420 7968 2838
elisa.morniroli cyates aflynn
@glencore.com @xstrata.com @xstrata.com
PR Advisers
Finsbury Aura Financial
Guy Lamming +44 (0) 20 7251 3801 Michael Oke +44 (0) 20 7321 0000
Dorothy Burwell Stephen Breslin
Andy Mills
StockWell Communications
Philip Gawith +44 (0) 20 3370 0013
Financial Advisers to Glencore Financial Advisers to Xstrata
Citigroup Global Markets Limited Deutsche Bank (Joint Financial Adviser and Joint
Corporate Broker)
David Wormsley +44 20 7986 4000 Nigel Robinson +44 20 7545 3951
Simon Lindsay Khaled Fathallah +44 20 7545 6333
Nick Bowers (Corporate
Tom Reid Broking) +44 20 7547 6937
Morgan Stanley & Co. Limited J.P. Morgan Limited (Joint Financial Adviser and Joint
Corporate Broker)
Michel Antakly +44 20 7425 8000 Barry Weir +44 20 7588 2828
Laurence Hopkins Neil Passmore (Corporate
Broking)
Paul Baker
Goldman Sachs International (Joint Financial Adviser)
Brett Olsher +44 20 7774 1000
Nick Harper
Nomura International plc (Joint Financial Adviser)
William Vereker +44 20 7521 2000
William Barter
Further information
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Merger or otherwise nor shall there
be any sale, issuance or transfer of securities in any jurisdiction
in contravention of applicable law. The Merger will be made solely
by means of the New Scheme Document, which, together with the
Further Forms of Proxy, will contain the full terms and conditions
of the Merger including details of how to vote in respect of the
Merger. Xstrata will prepare the New Scheme Document to be
distributed to Xstrata Shareholders. Xstrata urges Xstrata
Shareholders to read the New Scheme Document when it becomes
available because it will contain important information in relation
to the Merger. Glencore will prepare the Further Glencore Circular
to be distributed to Glencore Shareholders. Glencore urges Glencore
Shareholders to read the Further Glencore Circular when it becomes
available because it will contain important information in relation
to the Merger. Any vote in respect of the New Scheme or other
response in relation to the Merger should be made only on the basis
on the information contained in the New Scheme Document.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Please be aware that addresses, electronic addresses and certain
other information provided by Xstrata Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Xstrata may be provided to Glencore during the
offer period as required under Section 4 of Appendix 4 of the Code
to comply with Rule 2.12(c).
Citigroup Global Markets Limited, which is authorised and
regulated in the United Kingdom by the FSA, is acting exclusively
for Glencore and no-one else in connection with the matters set out
in this announcement and will not be responsible to any person
other than Glencore for providing the protections afforded to
clients of Citigroup Global Markets Limited or for providing advice
in relation to the matters set out in this announcement.
Morgan Stanley & Co. Limited is acting as financial adviser
to Glencore and no one else in connection with the Merger and will
not be responsible to anyone other than Glencore for providing the
protections afforded to the clients of Morgan Stanley & Co.
Limited nor for providing advice in relation to the potential
Merger, the contents of this announcement or any other matter or
arrangement referred to herein.
Deutsche Bank AG is authorised under German Banking Law
(competent authority: BaFin - Federal Financial Supervisory
Authority) and authorised and subject to limited regulation by the
FSA. Details about the extent of Deutsche Bank AG's authorisation
and regulation by the FSA are available on request. Deutsche Bank
AG, London Branch is acting as financial adviser and corporate
broker to Xstrata and no one else in connection with the Merger and
will not be responsible to anyone other than Xstrata for providing
the protections afforded to clients of Deutsche Bank AG, London
Branch, nor for providing advice in relation to the Merger or for
any of the matters referred to in this announcement.
J.P. Morgan Limited, which conducts its UK investment banking
business as J.P. Morgan Cazenove and is authorised and regulated in
the United Kingdom by the FSA, is acting as financial adviser and
corporate broker to Xstrata and for no one else in connection with
the Merger and will not be responsible to anyone other than Xstrata
for providing the protections afforded to its clients nor for
providing advice in relation to the Merger of for any of the
matters set out in this announcement.
Goldman Sachs International, which is authorised and regulated
in the United Kingdom by the FSA, is acting as financial adviser to
Xstrata and for no one else in connection with the Merger and will
not be responsible to anyone other than Xstrata for providing the
protections afforded to clients of Goldman Sachs International nor
for providing advice in relation to the Merger, the content of this
announcement or any matter referred to herein.
Nomura International plc, which conducts its UK investment
banking business as Nomura and is authorised and regulated in the
United Kingdom by the FSA, is acting as financial adviser to
Xstrata and for no one else in connection with the matters set out
in this announcement and will not be responsible to anyone other
than Xstrata for providing the protections afforded to its clients
nor for providing advice in relation to the matters set out in this
announcement.
Barclays Bank PLC, acting through its investment bank
("Barclays"), which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial
adviser to Xstrata and no-one else in connection with the Merger
and will not regard any other person (whether or not a recipient of
this document) as a client in relation to the Merger and will not
be responsible to anyone other than Xstrata for providing the
protections afforded to its clients, nor for providing advice in
connection with the Merger or any other matter referred to
herein.
Notice to US holders of Xstrata Shares
The Merger will involve an exchange of the securities of a UK
company for the securities of a Jersey company and will be subject
to Jersey and UK disclosure requirements, which are different from
those of the United States. The financial information included in
this announcement has been prepared in accordance with
International Financial Reporting Standards and thus may not be
comparable to financial information of US companies or companies
whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States.
The Merger will be made by means of a scheme of arrangement
under the UK Companies Act and otherwise in accordance with the
requirements of the Code. The scheme of arrangement will relate to
the shares of a UK company that is a 'foreign private issuer' as
defined under Rule 3b-4 under the US Exchange Act.
Accordingly, the proposed combination will be subject to
disclosure and other procedural requirements applicable in the UK
to schemes of arrangement, which differ from the disclosure
requirements of the US proxy and tender offer rules under the US
Exchange Act.
Any securities to be issued under the Merger have not been and
will not be registered under the US Securities Act, or under the
securities laws of any state, district or other jurisdiction of the
United States, or of Australia, Canada or Japan. Accordingly such
securities may not be offered, sold or delivered, directly or
indirectly, in or into such jurisdictions except pursuant to
exemptions from applicable requirements of such jurisdictions. It
is expected that the New Glencore Shares will be issued in reliance
upon the exemption from such registration provided by Section
3(a)(10) of the US Securities Act. Under applicable US securities
laws, persons (whether or not US persons) who are or will be
"affiliates" (within the meaning of the US Securities Act) of
Xstrata or Glencore prior to, or of Glencore after, the Effective
Date will be subject to certain transfer restrictions relating to
the Glencore Shares received in connection with the New Scheme. It
may be difficult for US holders of Xstrata Shares to enforce their
rights and any claim arising out of the US federal securities laws,
since Glencore and Xstrata are located in a non-US jurisdiction,
and some or all of their officers and directors may be residents of
a non-US jurisdiction. US holders of Xstrata Shares may not be able
to sue a non-US company or its officers or directors in a non-US
court for violations of the US securities laws. Further, it may be
difficult to compel a non-US company and its affiliates to subject
themselves to a US court's judgment.
If Glencore elects, with the consent of the Panel (where
necessary) and with Xstrata's prior written consent, to implement
the Merger by way of a Merger Offer, the Merger will be made in
compliance with applicable US laws and regulations, including
applicable provisions of the tender offer rules under the US
Exchange Act, to the extent applicable.
Overseas jurisdictions
The availability of the Merger to Xstrata Shareholders who are
not resident in the UK may be affected by the laws of the relevant
jurisdictions in which they are located. Persons who are not
resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions.
Further details in relation to overseas shareholders will be
contained in the New Scheme Document.
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable requirements. Any failure to comply with
the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Merger disclaim any responsibility or liability for the
violation of such restrictions by any person. This announcement has
been prepared for the purposes of complying with English law, the
Listing Rules, the rules of the London Stock Exchange and the Code
and the information disclosed may not be the same as that which
would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
Unless otherwise determined by Glencore or required by the Code,
and permitted by applicable law and regulation, the Merger will not
be made, directly or indirectly, in, into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Merger by any
such use, means, instrumentality or form within a Restricted
Jurisdiction. Accordingly, copies of this announcement and formal
documentation relating to the Merger will not be and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in, into or from any Restricted Jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
this announcement and all documents relating to the Merger
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
Forward-looking statements
This announcement contains statements which are, or may be
deemed to be, "forward-looking statements" which are prospective in
nature. All statements other than statements of historical fact are
forward-looking statements. They are not based on current
expectations and projections about future events, and are therefore
subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied
by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes", "targets", "aims", "projects"
or words or terms of similar substance or the negative thereof, are
forward-looking statements, as well as variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Forward-looking statements include statements
relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of Glencore's or Xstrata's operations and
potential synergies resulting from the Merger; and (iii) the
effects of global economic conditions on Glencore's or Xstrata's
business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
the actual results, performance or achievements of Glencore or
Xstrata to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Important factors that could cause
actual results, performance or achievements of Glencore or Xstrata
to differ materially from the expectations of Glencore or Xstrata,
as applicable, include, among other things, general business and
economic conditions globally, commodity price volatility, industry
trends, competition, changes in government and other regulation,
including in relation to the environment, health and safety and
taxation, labour relations and work stoppages, changes in political
and economic stability, disruptions in business operations due to
reorganisation activities (whether or not Glencore combines with
Xstrata), interest rate and currency fluctuations, the failure to
satisfy any conditions for the Merger on a timely basis or at all,
the failure to satisfy the conditions of the Merger when
implemented (including approvals or clearances from regulatory and
other agencies and bodies) on a timely basis or at all, the failure
of Glencore to combine with Xstrata on a timely basis or at all,
the inability of the Combined Group to realise successfully any
anticipated synergy benefits when the Merger is implemented, the
inability of the Combined Group to integrate successfully
Glencore's and Xstrata's operations and programmes when the Merger
is implemented, the Combined Group incurring and/or experiencing
unanticipated costs and/or delays or difficulties relating to the
Merger when the Merger is implemented. Such forward-looking
statements should therefore be construed in light of such
factors.
Neither Xstrata nor Glencore, nor any of their respective
associates or directors, officers or advisers, provides any
representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in
this announcement will actually occur. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof.
Other than in accordance with its legal or regulatory
obligations (including under the Listing Rules and the Disclosure
and Transparency Rules of the FSA), neither Xstrata nor Glencore is
under any obligation and Xstrata and Glencore each expressly
disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecasts
No statement in this announcement is intended as a profit
forecast and no statement in this announcement should be
interpreted to mean that earnings per Glencore or Xstrata ordinary
share for the current or future financial years would necessarily
match or exceed the historical published earnings per Glencore or
Xstrata ordinary share.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the (1) 0th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the (1) 0th business day following
the announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (London time) on the business day following the date of
the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0) 20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website
A copy of this announcement will be available on Xstrata's
website at www.xstrata.com and on Glencore's website at
www.glencore.com.
You may request a hard copy of this announcement, free of
charge, by contacting the Company Secretary of Glencore, John
Burton, at john.burton@glencore.com or the Company Secretary of
Xstrata, Richard Elliston, at relliston@xstrata.com. You may also
request that all future documents, announcements and information to
be sent to you in relation to the Merger should be in hard copy
form.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN
PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
1 October 2012
RECOMMENDED ALL-SHARE MERGER OF EQUALS
of
GLENCORE INTERNATIONAL PLC
and
XSTRATA PLC
FINAL TERMS
The Glencore Directors and Independent Xstrata Non-Executive
Directors announce that they have reached agreement on the final
terms of a revised recommended all-share merger of equals of
Glencore and Xstrata on the basis set out in this announcement. The
terms of the Merger will provide holders of Scheme Shares with 3.05
New Glencore Shares for each Xstrata Share held. The Merger will be
effected by way of a Court-sanctioned scheme of arrangement of
Xstrata under Part 26 of the UK Companies Act, pursuant to which
Glencore will acquire the entire issued and to be issued ordinary
share capital of Xstrata not already owned by the Glencore Group.
Under the revised final terms of the Merger, passing of the
resolution to approve the Revised Management Incentive Arrangements
will not be a condition to the Merger proceeding.
1. The Merger
Under the terms of the Merger, which will be subject to the
Conditions and certain further terms set out in Appendix 1 to this
announcement and to be set out in the New Scheme Document and the
Further Forms of Proxy, Scheme Shareholders at the Scheme Record
Time will be entitled to receive:
for each Scheme Share 3.05 New Glencore Shares
On the basis of Glencore's closing share price of 343.10 pence
on 28 September 2012, the Merger values each Xstrata Share at
1,046.46 pence and the entire issued and to be issued share capital
of Xstrata at approximately GBP31.9billion ($51.5 billion).
The final Merger ratio of 3.05:
-- is approximately 17.6 per cent. higher than the ratio of 2.59
implied by the middle market closing share prices of Xstrata and
Glencore on 1 February 2012, being the last business day prior to
the announcement by Xstrata that it was in discussions with
Glencore;
-- is approximately 25.5 per cent. higher than the ratio of 2.43
being the average of the ratios implied by the middle market
closing share prices of the two companies between 3 September 2012
and 6 September 2012, the latter being the last business day prior
to the announcement by Xstrata of the revised proposal from
Glencore;
-- is approximately 58.5 per cent. higher than the lowest ratio
of 1.92 implied by the middle market closing share prices of the
two companies between Glencore's IPO on 19 May 2011 and 1 February
2012, being the last day prior to the announcement by Xstrata that
it was in discussions with Glencore; and
-- exceeds the highest ratio of 2.90 implied by the middle
market closing share prices of the two companies between Glencore's
IPO on 19 May 2011 and 1 February 2012, being the last day prior to
the announcement by Xstrata that it was in discussions with
Glencore.
Xstrata Shareholders other than Glencore will own approximately
47.4 per cent. of the Combined Entity's share capital compared with
45.2 per cent. (other than Glencore) under the original Merger
terms[1].
2. Recommendation
The Independent Xstrata Non-Executive Directors, who have been
so advised byeach of the Xstrata Financial Advisers, consider the
terms of the Merger to be fair and reasonable, but only if the
Revised Management Incentive Arrangements Resolution is passed at
the Further Xstrata General Meeting. In providing its advice, each
of the Xstrata Financial Advisers has taken into account the
commercial assessments of the Independent Xstrata Non-Executive
Directors.
Accordingly, the Independent Xstrata Non-Executive Directors
intend unanimously to recommend eligible Xstrata Shareholders to
vote to approve: (i) the New Scheme, but only if the Revised
Management Incentive Arrangements Resolution is passed at the
Further Xstrata General Meeting; and (ii) the Revised Management
Incentive Arrangements (in each case, as the Independent Xstrata
Non-Executive Directors who hold or are beneficially entitled to
Xstrata Shares have irrevocably undertaken to do in respect of
their own Xstrata Shares, representing approximately 0.1 per cent.
of the issued ordinary share capital of Xstrata).
The Glencore Directors consider the Merger to be in the best
interests of Glencore Shareholders taken as a whole. Accordingly,
the Glencore Directors intend unanimously to recommend Glencore
Shareholders to vote in favour of the resolution to be proposed at
the Glencore General Meeting to approve the Merger and related
resolutions as the Glencore Directors who hold or are beneficially
entitled to Glencore Shares have irrevocably undertaken to do in
respect of their own Glencore Shares (representing approximately
16.9 per cent. of the issued ordinary share capital of
Glencore).
3. Independent Xstrata Non-Executive Directors' assessment of
the revised and final terms of the Merger and the New Scheme
Prior to the Independent Xstrata Non-Executive Directors'
recommendation of a merger with Glencore earlier this year, the
board considered a wide range of alternatives to realise value for
Xstrata Shareholders. Discussions initiated by Glencore on several
occasions over a period of five years about a potential combination
were not pursued, despite the clear strategic rationale for the
transaction, because Xstrata's board was not satisfied with the
overall value proposition and protections for non-Glencore Xstrata
Shareholders. Negotiations in late 2011 finally yielded a proposal
that, when considered in its entirety, would, in the view of the
Independent Xstrata Non-Executive Directors, create superior value
for Xstrata Shareholders and should therefore be put to Xstrata
Shareholders for consideration.
The original Merger terms received a high degree of scrutiny by
the Independent Xstrata Non-Executive Directors to assess the
fairness of the terms for Xstrata Shareholders other than the
Glencore Group, the arrangements in place to safeguard the
interests of such shareholders following completion of the Merger
and the ability of the Combined Group to deliver superior returns.
The Independent Xstrata Non-Executive Directors' decision to
recommend the Original Scheme was dependent upon the agreed
governance and management structure (including the Management
Incentive Arrangements) as integral and inseparable elements of the
transaction. A detailed description of the factors considered by
the Independent Xstrata Non-Executive Directors is set out in the
Original Scheme Document.
On 10 September 2012, Glencore announced improved terms of the
Merger conditional upon Ivan Glasenberg assuming the role of CEO of
the Combined Group upon Mick Davis's departure six months after the
Effective Date. The Independent Xstrata Non-Executive Directors
have consulted with major Xstrata Shareholders and have taken into
account their views regarding the revised terms and the various
implications of the proposed change in CEO.
In considering the Merger, the Independent Xstrata Non-Executive
Directors received financial advice from the Xstrata Financial
Advisers. Of the Xstrata Financial Advisers, Nomura International
plc was asked to provide financial advice specifically to the
Independent Xstrata Non-Executive Directors. Nomura's fee is
predominately payable at the discretion of Xstrata irrespective of
whether the Merger is implemented or not.
The intention of the Independent Xstrata Non-Executive Directors
to recommend unanimously the revised terms, on the basis set out in
paragraph 2 above, follows a process of consultation with major
shareholders and of clarification with Glencore on certain aspects
of the proposed governance and management arrangements going
forward.
The Independent Xstrata Non-Executive Directors have taken into
account the following factors:
Strategic rationale
The strategic rationale for the Merger remains compelling.
Combining a major mining company with the leading global
commodities marketing group will create a unique business model in
the natural resources sector and enhance the Combined Group's
capacity to create superior shareholder value. The Merger will also
clarify the ownership structure of Xstrata, providing the board and
management with a full range of corporate development options.
Shareholder feedback
Feedback from Xstrata's consultation with shareholders has
highlighted divergent views on a number of key issues. A number of
shareholders have raised heightened concerns over the ability to
retain Xstrata operational management and a robust governance
structure in light of the change in CEO which was a condition to
Glencore's increased merger ratio. Other shareholders are opposed
to the inter-conditional nature of the resolutions to approve the
Merger and the Revised Management Incentive Arrangements and/or the
principle of retention payments.
The Independent Xstrata Non-Executive Directors have sought to
address the range of shareholder views in the revised final Merger
terms by:
-- maintaining the board structure set out in the Original
Scheme Document. In addition, Ivan Glasenberg has given an
irrevocable undertaking in his capacity as a major shareholder to
support the governance structure for a minimum of two years
following the Effective Date;
-- addressing the risks from the change of CEO, with an Xstrata
operational executive being appointed as an executive director of
the Combined Entity upon Mick Davis's departure; and
-- implementing a voting structure in respect of the New Scheme
which takes into account the divergent shareholder views on the
Revised Management Incentive Arrangements. Under the New Scheme,
passing of the resolution to approve the Revised Management
Incentive Arrangements will no longer be a condition to the Merger
proceeding, and as a result the Merger may proceed even if the
Revised Management Incentive Arrangements are not approved. The New
Scheme allows eligible Xstrata Shareholders to vote in line with
their convictions on both the New Scheme and the Revised Management
Incentive Arrangements by decoupling the other resolutions to
approve the Merger from the resolution to approve the Revised
Management Incentive Arrangements. At the same time, the structure
also enables eligible Xstrata Shareholders to approve the Merger
only if the resolution to approve the Revised Management Incentive
Arrangements at the Further Xstrata General Meeting is passed, in
line with the Independent Xstrata Non-Executive Directors'
recommendation.
Financial terms
The Independent Xstrata Non-Executive Directors, having been so
advised by each of the Xstrata Financial Advisers, believe that the
revised and final financial terms of the Merger are fair and
reasonable as far as Xstrata Shareholders are concerned, provided
that the agreed robust governance structure referred to in this
announcement is in place and only if the resolution to approve the
Revised Management Incentive Arrangements is passed to provide
greater assurance that Xstrata's operational management will
transition into the Combined Entity and manage the mining
operations that will contribute the vast majority of the Combined
Group's earnings. In providing its advice, each of the Xstrata
Financial Advisers has taken into account the commercial
assessments of the Independent Xstrata Non-Executive Directors.
The ownership in the Combined Entity compensates Xstrata
Shareholders for the contribution Xstrata makes in the Combined
Group and the potential risks of the proposed Merger. The premium
represents an immediate significant value uplift for Xstrata
Shareholders, in particular in the light of:
(i) Glencore's existing 33.65 per cent. shareholding in Xstrata
and the fact that there is little prospect of a higher offer from a
third party;
(ii) the fact that in the all-share Merger Xstrata Shareholders
will retain a significant shareholding in the Combined Group;
and
(iii) the premium to Xstrata Shareholders comparing favourably
with premia paid in comparable merger transactions and in
particular mergers involving a major existing shareholder.
The Merger is expected to be earnings and net asset value
accretive to Xstrata Shareholders in the first full financial year
of the Combined Group before synergies[2].
Significant expected annual EBITDA synergies are estimated to be
at least US$500 million in first full year of Combined Group,
predominantly marketing related. The Combined Group will also
pursue additional, yet to be identified, Merger-related cost
savings of US$300 million, the achievement of which will determine
the vesting of share-based Revised Management Incentive
Arrangements for the members of Xstrata's Management, excluding
Mick Davis, if the resolution to approve the Revised Management
Incentive Arrangements is passed.
Governance structure
The robust governance structure (as set out in paragraph 4) will
safeguard the interests of Xstrata Shareholders by providing an
appropriate balance to the significant shareholdings of current
Glencore executives.
Xstrata directors will hold six of eleven positions on the board
of the Combined Entity, including Sir John Bond who will be
nominated as non-executive Chairman with the casting vote.
Committees of the Board will have the same membership as set out in
the Original Scheme Document dated 31 May 2012.
Mick Davis will be a director of the Combined Entity and CEO of
the Combined Group for a term of six months following the Effective
Date to oversee the integration of the two businesses. Thereafter,
Ivan Glasenberg is to become CEO of the Combined Group. A current
Xstrata Group operational executive will be nominated by Ivan
Glasenberg and agreed with the Chairman and Senior Independent
Director to replace Mick Davis upon his departure, as an executive
director of the Combined Entity.
The potential risks resulting from the change in leadership have
been addressed by Ivan Glasenberg to the satisfaction of the
Independent Xstrata Non-Executive Directors.
An irrevocable undertaking has been provided by Ivan Glasenberg
representing 8.4 per cent. of the Combined Entity's issued share
capital not to use voting rights or other influence in his capacity
as a shareholder of Glencore to depart from the agreed governance
structure for a minimum of two years following the Effective
Date.
Any person appointed by the board of the Combined Entity to
replace any non-executive director will be independent for the
purposes of the UK Corporate Governance Code and will be selected
by the nominations committee of the Combined Entity.
Retention of key Xstrata management
The Independent Xstrata Non-Executive Directors and the Glencore
Directors continue to believe that the retention of key Xstrata
management is critical for the future success of the Combined Group
and to ensure the transaction is completed as a merger of equals as
contemplated. The Revised Management Incentive Arrangements aim to
secure the appropriate skills and experience to run the mining
operations that will contribute over 80 per cent. of the Combined
Group's earnings[3].
The retention of key Xstrata managers, the revised and final
exchange ratio and the governance structure together form the value
proposition of the Merger for Xstrata Shareholders. Consequently,
the Independent Xstrata Non-Executive Directors intend to recommend
that Xstrata Shareholders vote in favour of the resolution to
approve the Revised Management Incentive Arrangements and to
recommend that Xstrata Shareholders vote in favour of the New
Scheme but only if the resolution to approve the Revised Management
Incentive Arrangements is passed.
The Independent Xstrata Non-Executive Directors' intended
recommendation is consistent with the original recommendation to
eligible Xstrata Shareholders to approve the inter-conditional
Merger and the Management Incentive Arrangements resolutions, while
the New Scheme structure enables shareholders a choice in respect
of the two resolutions.
The Independent Xstrata Non-Executive Directors' believe that
the Revised Management Incentive Arrangements provide greater
assurance that key Xstrata managers will be retained within the
agreed organisational structure to ensure a smooth integration
process, the ongoing stability of the Combined Group's 150 mining
and metallurgical operations and the effective delivery of more
than 20 approved major growth projects. Without the ability to
retain key managers through the Revised Management Incentive
Arrangements, the Independent Xstrata Non-Executive Directors
believe that the value proposition of the Combined Entity is at
risk.
New contracts of employment for Xstrata's Management (not
including Mick Davis) with the Combined Group will take effect
immediately following the New Scheme becoming effective, but only
if the Revised Management Incentive Arrangements are approved by
eligible Xstrata Shareholders. As set out in paragraph 5, Mick
Davis's new contract of employment with the Combined Group will
take effect immediately following the New Scheme becoming effective
but Mick Davismay in his sole discretion terminate his new contract
of employment before the end of the six month period from the
Effective Date of the New Scheme if the resolution required to give
effect to the Revised Management Incentive Arrangements is not
approved by eligible Xstrata Shareholders.
4. Governance and management structure for the Combined Group
Board of directors and committees of the board of the Combined
Entity
Save for those amendments summarised below the board and
committees structure of the Combined Entity shall be as set out on
page 15 of the Original Scheme Document under the heading "Board
composition" and on page 17 of the Original Scheme Document under
the heading "Executive Committee".
Current Xstrata CEO, Mick Davis will become CEO of the Combined
Group for a period of six months following the Effective Date
(further details of the terms of the arrangement between Mick Davis
and the Combined Entity are set out in paragraph 5 below).
Thereafter, he will cease to be on the board of directors of the
Combined Entity or CEO of the Combined Group and will be replaced
as CEO of the Combined Group by Ivan Glasenberg, current Glencore
CEO, whereupon the role of President/Deputy CEO will cease to
exist.
After the Effective Date, the person appointed by the board of
directors of the Combined Entity as a replacement for any director
(other than Mick Davis and Ivan Glasenberg) who ceases to be
director of the Combined Entity for any reason, shall be a person
who is independent for the purposes of the UK Corporate Governance
Code. Any such person will be identified by the Nominations
Committee of the Combined Entity.
In the case of Mick Davis, the person appointed by the board of
directors of the Combined Entity as his replacement shall be an
operational executive employed by the Xstrata Group prior to the
Effective Date, nominated by Ivan Glasenberg and agreed with the
Chairman and the Senior Independent Director.
Management and organisational structure
Save for amendments to reflect the fact that Mick Davis will
cease to be CEO of the Combined Group or on the board of directors
of the Combined Entity after the initial six months from the
Effective Date and that Ivan Glasenberg will become CEO of the
Combined Group with all the customary powers of a CEO, the proposed
management and organisational structure of the Combined Group will
be as described on pages 15 to 17 inclusive of the Original Scheme
Document under the heading "Management structure" and on pages 17
and 18 of the Original Scheme Document under the heading
"Organisational structure".
Ivan Glasenberg has irrevocably undertaken in respect of his
shareholding of approximately 8.4 per cent. of the Combined
Entity's enlarged issued share capital not to use his voting rights
or other influence in his capacity as a shareholder of Glencore to
depart from the agreed governance principles for the Combined Group
referred to above for a period of not less than two years following
the New Scheme becoming effective. In addition, the Principal
Shareholders, who in aggregate will hold approximately 12.1 per
cent. of the Combined Entity's issued share capital, have indicated
their support for the governance principles referred to above.
5. Revised Management Incentive Arrangements
Arrangements for Mick Davis
If the Merger completes in accordance with the final revised
terms, Mick Davis will serve as the CEO of the Combined Group and
as a director of the Combined Entity for a period of six months
from the Effective Date. Mick Davis will not participate in the
Revised Management Incentive Arrangements (i.e. the "retention
awards" described on pages 31 and 32 of the Original Scheme
Document which were to be paid in the form of Glencore Shares as
described on pages 15 and 16 of the Supplementary Scheme Document
and nor will he participate in the Glencore PSP (as defined in and
described on page 33 of the Original Scheme Document and page 17 of
the Supplementary Scheme Document)). The existing agreement entered
into between Mick Davis and Glencore in connection with the Merger
on 6 February 2012 (and as amended on the basis described in the
Supplementary Scheme Document) has been terminated.
Mick Davis has waived his rights to the "retention awards" to be
granted under the New Xstrata 2012 Plan (as defined and described
in the Supplementary Scheme Document) and the terms of the New
Xstrata 2012 Plan (as defined and described in the Supplementary
Scheme Document) have been amended to remove Mick Davis's
awards.
Upon termination of his existing employment with the Xstrata
Group, Mick Davis will receive a sum equal to annual salary, 2011
bonus and other benefits and pension allowance (which is quantified
at GBP9,598,475), in accordance with the terms of his existing
employment contract with the Xstrata Group originally entered into
in 2002 (and amended in May 2010) and which are summarised on page
32 of the Original Scheme Document). No further termination payment
will be payable at the end of the six-month contract with the
Combined Group.
Mick Davis has entered into a new agreement with the Combined
Group for a term of six months from the Effective Date (neither
party may terminate before the end of this six month period, except
as described below). Under this agreement, he is appointed as CEO
of the Combined Group with all the customary powers of a CEO to
oversee the integration of the two businesses. The terms of this
six month employment agreement are identical to the current terms
of his existing employment agreement with the Xstrata Group as to
salary, benefits, bonus (pro rated for the six month period) and
pension allowance, (all to be paid/reviewed consistent with past
Xstrata practice) but with no additional entitlement to any
contractual termination payment upon termination at the end of the
six month period from the Effective Date.
The terms of this agreement further specify that, if there is a
termination of Mick Davis's employment by the Combined Group in
breach of the agreement during this period, he will be entitled to
the pay and benefits he would have been entitled to receive for the
balance of the period. However, Mick Davis may in his sole
discretion terminate his new service agreement with the Combined
Group before the end of the six month period from the Effective
Date if the Revised Management Incentive Arrangements Resolution is
not passed at the Further Xstrata General Meeting. In such
circumstances, Mick Davis will not be entitled to the pay, bonus,
benefits and pension allowance he would have been entitled to
receive for the balance of the period and neither party shall have
any claims or rights of action against the other whether
contractual, statutory or arising under any law, arising out of or
in connection with such termination of employment, except for any
accrued rights at such date of termination. In addition, Mick
Davis's new agreement referred to above is not capable of being
extended beyond six months.
Arrangements for all other participants in the Revised
Management Incentive Arrangements other than Mick Davis
All members of Xstrata's Management (other than Mick Davis) have
entered into individual contracts of employment with Glencore which
shall take effect immediately following the Effective Date but only
if a resolution is passed by eligible Xstrata Shareholders at the
Further Xstrata General Meeting to approve the Revised Management
Incentive Arrangements to replace the conditional contracts entered
into on 6 February 2012. These new contracts of employment also
reflect the fact that Mick Davis will cease to be a director of the
Combined Entity and CEO of the Combined Group and that this will no
longer constitute an amendment to the agreed governance structure.
Such individuals' employment with the Combined Group will only come
into effect if the New Scheme becomes effective and a resolution is
passed by eligible Xstrata Shareholders at the Further Xstrata
General Meeting to approve the Revised Management Incentive
Arrangements.
As regards all other participants in the Revised Management
Incentive Arrangements, the agreements under which such individuals
will be entitled to the Revised Management Incentive Arrangements
will all be amended to reflect the fact that Mick Davis will cease
to be a director of the Combined Entity and CEO of the Combined
Group after the initial six months following the Effective Date,
which will no longer constitute an amendment to the agreed
governance structure. Such relevant individuals will only be
entitled to the Revised Management Incentive Arrangements if a
resolution is passed by eligible Xstrata Shareholders at the
Further Xstrata General Meeting to approve the RevisedManagement
Incentive Arrangements.
Save as set out above, the various elements of the Management
Incentive Arrangements set out on pages 31 - 34 inclusive of the
Original Scheme Document and pages 14 - 18 inclusive of the
Supplementary Scheme Document shall constitute the Revised
Management Incentive Arrangements.
6. Irrevocable Undertakings
In aggregate, Glencore has received irrevocable undertakings
from those of the Independent Xstrata Directors who hold or are
beneficially entitled to Xstrata Shares to vote in favour of the
New Scheme in accordance with the recommendation of the Independent
Xstrata Non-Executive Directors in respect of 3,519,387 Xstrata
Shares, representing in aggregate approximately 0.1 per cent. of
Xstrata's existing issued share capital.
In aggregate, Xstrata and Glencore have received irrevocable
undertakings from those of the Glencore Directors who hold or are
beneficially entitled to Glencore Shares and also from the
Principal Shareholders to vote in favour of the resolutions to be
proposed at the Glencore General Meeting to approve the Merger and
related resolutions in respect of 2,691,111,828 Glencore Shares,
representing in aggregate approximately 38.9 per cent. of
Glencore's existing issued share capital.
Further details of the irrevocable undertakings are set out in
Appendix 3.
7. Information relating to Glencore
A summary of Glencore's business and operations and various
other information relating to Glencore is set out on pages 27 and
28 of the Original Scheme Document. Glencore announced its
half-yearly results for the half year ended 30 June 2012 on 21
August 2012. A copy of that announcement is available at
www.glencore.com.
8. Information relating to Xstrata
A summary of Xstrata's business and operations and various other
information relating to Xstrata is set out on pages 28 and 29 of
the Original Scheme Document. Xstrata announced its half yearly
results for the half year ended 30 June 2012 on 7 August 2012. A
copy of that announcement is available from the Xstrata website at
www.xstrata.com.
9. Synergies and earnings
The combination of Xstrata and Glencore is expected to deliver
estimated annual EBITDA synergies of at least US$500 million in the
first full year of the Combined Group, which are predominantly
marketing related. The Combined Group will also pursue additional,
yet to be identified, Merger-related cost savings of US$300
million, the achievement of which will determine the vesting of
share-based Revised Management Incentive Arrangements for the
members of Xstrata's Management, excluding Mick Davis, if the
resolution to approve the Revised Management Incentive Arrangements
is passed.
The combination is expected to be earnings per share accretive
to Xstrata Shareholders pre synergies in the first full year
following completion of the Merger.[4]
10. Management and employees
As is set out in the Original Scheme Document, key elements of
the post-Merger organisation and joint integration approach have
been agreed. The proposed management structure for the Combined
Group will ensure that the benefits of Xstrata's devolved
organisational model are maintained and that the Combined Group
benefits fully from the complementary skills of the two companies.
The new business model resulting from the merger of these companies
relies on the ability to retain key personnel.
Glencore and Xstrata attach great importance to the skills and
experience of the existing management and employees of Xstrata and
believe that they will benefit from greater opportunities within
the Combined Group. Glencore has given assurances to the
Independent Xstrata Directors that, following completion of the
Merger, the pre-existing monetary rights of all Xstrata employees,
including employment, share scheme, bonus scheme and pension rights
will be fully safeguarded.
In addition, all participants in Xstrata's existing Long Term
Incentive Plan will be able to maintain an ongoing shareholding in
the Combined Group and convert existing options into new options
over shares in the Combined Entity on terms that are equivalent to
the existing exercise price and duration.
11. Xstrata Share Schemes
Details of the proposals to be put to participants in the
Xstrata Share Schemes will be set out in the New Scheme Document
and in separate letters to be sent to participants in the Xstrata
Share Schemes and the New Xstrata 2012 Plan. These proposals will
be identical to the proposals described on pages 34 to 36 inclusive
of the Original Scheme Document subject to any reference to the
merger ratio being consistent with the increased merger ratio
referred to above.
12. Offer-related arrangements
Glencore and Xstrata entered into a mutual confidentiality
agreement on 12 December 2011 (the "Confidentiality Agreement")
pursuant to which each of Glencore and Xstrata has undertaken to
keep confidential information relating to the other party and not
to disclose it to third parties (other than to permitted
disclosees) unless required by law or regulation. These
confidentiality obligations will remain in force until completion
of the Merger, or for a period of two years from any date of
termination of discussions or negotiations relating to the
Merger.
Glencore and Xstrata also entered into a reverse break fee
agreement on 7 February 2012 (the "Break Fee Agreement") pursuant
to which Glencore agreed to pay to Xstrata by way of compensation a
fee in the amount of GBP298 million (inclusive of irrecoverable
value added tax), payable in the event that Glencore's board
withdraws, amends, modifies or qualifies its recommendation of the
Merger or resolves or agrees to do the same (a "Glencore Change in
Recommendation") so as to cause the Merger not to proceed, save
where the Glencore Change in Recommendation occurs, directly or
indirectly, as a result of an event or events outside the control
of Glencore. In light of the revised final terms of the Merger set
out in this announcement, on 1 October 2012 Glencore and Xstrata
entered into an amendment agreement to the Break Fee Agreement (the
"Break Fee Amendment Agreement") to (i) reflect the revised final
terms of the Merger, and (ii) as required by the provisions of the
Listing Rules, record the parties' agreement that the fee to be
paid in the circumstances outlined above shall be reduced to an
amount of GBP288 million. (inclusive of any irrecoverable value
added tax). The terms of the Break Fee Agreement otherwise remain
unchanged and in full force and effect.
13. Structure of the Merger
It is intended that the Merger will be implemented by way of a
Court-sanctioned scheme of arrangement between Xstrata and the
Scheme Shareholders, under Part 26 of the UK Companies Act.
Glencore reserves the right to elect, with the consent of the Panel
(where necessary) and with Xstrata's prior written consent, to
implement the Merger by way of a Merger Offer.
Accordingly, the Independent Xstrata Non-Executive Directors,
with the agreement of Glencore, propose that under the revised
final terms of the Merger, the passing of the resolution to approve
the Revised Management Incentive Arrangements will no longer be a
condition to the Merger proceeding, meaning that the Merger may
proceed if a requisite majority of eligible Xstrata Shareholders
approve the New Scheme, even if the Revised Management Incentive
Arrangements are not approved.
The Independent Xstrata Non-Executive Directors, with the
agreement of Glencore, propose that the voting structure for the
New Scheme will involve the following two resolutions being
proposed to eligible Xstrata Shareholders at the New Court
Meeting:
1. a resolution to approve the New Scheme subject to the
resolution to approve the Revised Management Incentive Arrangements
to be put to the Further Xstrata General Meeting being passed. The
Independent Xstrata Non-Executive Directors intend to recommend
unanimously that eligible Xstrata Shareholders vote in favour of
only this resolution; and
2. a resolution to approve the New Scheme subject to the
resolution to approve the Revised Management Incentive Arrangements
to be put to the Further Xstrata General Meeting not being
passed.
Eligible Xstrata Shareholders should vote on both resolutions to
be proposed at the New Court Meeting. In order for each resolution
to be passed, it will require the approval of 75 per cent. by value
and a majority by number of eligible Xstrata Shareholders voting
(in person or by proxy) on that resolution. Votes cast "FOR" or
"AGAINST" a resolution to be proposed at the New Court Meeting will
not be aggregated with (and shall therefore not count towards the
requisite majorities for) votes in respect of the other resolution
to be proposed at the New Court Meeting.
Eligible Xstrata Shareholders should also vote on the
resolutions to be put to the Further Xstrata General Meeting, one
of which will be an ordinary resolution to approve the Revised
Management Incentive Arrangements. The outcome of the vote on the
ordinary resolution to approve the Revised Management Incentive
Arrangements at the Further Xstrata General Meeting will determine
which of the two New Scheme resolutions will be disregarded as
follows:
-- If the Revised Management Incentive Arrangements are approved
then the second resolution set out above will be disregarded.
-- If the Revised Management Incentive Arrangements are not
approved, then the first resolution will be disregarded.
-- The result of the vote on the remaining resolution to approve
the New Scheme will then determine whether or not the resolution
becomes effective and, therefore whether or not, the Merger
proceeds (subject to the satisfaction (or, if applicable, the
waiver) of the other Conditions).
This voting structure provides eligible Xstrata Shareholders
with the ability to vote against the resolution to approve the
Revised Management Incentive Arrangements in the knowledge that a
vote against the Revised Management Incentive Arrangements is not
necessarily a vote against the Merger. It also preserves the
ability of eligible Xstrata Shareholders to vote in favour of the
New Scheme but only if the Revised Management Incentive
Arrangements are approved. However, the Independent Xstrata
Non-Executive Directors intend to recommend unanimously that
eligible Xstrata Shareholders vote to approve the New Scheme only
if the Revised Management Incentive Arrangements are approved.
Eligible Xstrata Shareholders should note that if the relevant high
voting thresholds are not met in respect of either New Scheme
resolution, the Merger will lapse.
The full terms and conditions of the New Scheme, as set out in
Appendix 1, will be set out in the New Scheme Document. In
addition, the New Scheme Document and the Further Forms of Proxy
will contain clear instructions on how eligible Xstrata
Shareholders should vote depending on their view of the New Scheme
and the Revised Management Incentive Arrangements. It is expected
that the New Scheme Document will be posted and made available to
(among others) Xstrata Shareholders during October 2012.
In addition, the voting structure of the New Scheme may be
amended if required by the Court or otherwise only with each of
Xstrata's and Glencore's written consent and, in each case, with
the consent of the Panel (where necessary).
14. Listing, dealings and settlement
Applications will be made to the UK Listing Authority for the
New Glencore Shares to be admitted to the Official List and to the
London Stock Exchange for the New Glencore Shares to be admitted to
trading on the London Stock Exchange's market for listed securities
("Admission").
It is expected that Admission will become effective and that
dealings for normal settlement in the New Glencore Shares will
commence on the London Stock Exchange at 8.00 a.m. on the Effective
Date.
Application will also be made for the New Glencore Shares to be
admitted to listing and trading on the Main Board of the Hong Kong
Stock Exchange.
15. Delisting and re-registration
It is intended that an application will be made to the UK
Listing Authority for the cancellation of (i) the listing of the
Xstrata Shares on the Official List and to the London Stock
Exchange for the cancellation of trading of the Xstrata Shares on
the London Stock Exchange's main market for listed securities, and
(ii) the primary listing and trading of the Xstrata Shares on the
SIX Swiss Exchange, with effect as of or shortly following the
Effective Date.
It is also intended that, following the New Scheme becoming
effective, Xstrata will be re-registered as a private company under
the relevant provisions of the UK Companies Act.
16. Glencore Shareholder approval
As a result of the size of the transaction, the Merger
constitutes a Class 1 transaction (as defined in the Listing Rules)
for Glencore. Accordingly, Glencore will be required to seek the
approval of Glencore Shareholders for the Merger at the Glencore
General Meeting. Glencore is required to prepare and send to
Glencore Shareholders the Further Glencore Circular which will
summarise the background to and reasons for the revised final terms
of the Merger (which will include a notice convening the Glencore
General Meeting). The Merger is conditional on, amongst other
things, the resolutions to approve the Merger as a "Class 1"
transaction and to grant authority to the Glencore Directors to
allot the New Glencore Shares (but not, for the avoidance of doubt,
the resolution to approve the proposed change of Glencore's name
following the Merger becoming effective) being passed by Glencore
Shareholders at the Glencore General Meeting.
The Further Glencore Circular containing the notice convening
the Glencore General Meeting will be sent to Glencore Shareholders
at or around the same time as the posting of the New Scheme
Document to Xstrata Shareholders, which is expected to be during
October 2012.
It is also expected that, in accordance with the Prospectus
Rules, Glencore will publish further documentation containing
updated information about the New Glencore Shares during October
2012.
17. Overseas shareholders
The availability of the Merger to persons not resident in, and
distribution of this announcement to Xstrata Shareholders who are
not resident in, the United Kingdom may be affected by the laws of
their relevant jurisdiction. Such persons should inform themselves
of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. Xstrata Shareholders who are in any doubt
regarding such matters should consult an appropriate independent
professional adviser in the relevant jurisdiction without
delay.
This announcement does not constitute an offer for sale for any
securities or an offer or an invitation to purchase any securities.
Xstrata Shareholders are advised to read carefully the New Scheme
Document and related Further Forms of Proxy once these have been
dispatched.
18. Documents on display
Copies of the following documents will, by no later than 12 noon
(London time) on 2 October 2012, be published on Xstrata's website
at www.xstrata.com and Glencore's website at www.glencore.com until
the Effective Date:
-- the irrevocable undertakings referred to in paragraph 6 above
and summarised in Appendix 3 to this announcement;
-- the Break Fee Amendment Agreement; and
-- the Confidentiality Agreement.
19. General
The Merger will be subject to the Conditions and certain further
terms set out in Appendix 1 and the certain further terms and
conditions set out in the New Scheme Document and the related
Further Forms of Proxy when issued.
The New Scheme will be governed by English law and will be
subject to the jurisdiction of the courts of England and Wales. The
New Scheme will be subject to the applicable requirements of the
Code, the Panel, the London Stock Exchange and the FSA.
The bases and sources of certain financial information contained
in this announcement are set out in Appendix 2. Certain terms used
in this announcement are defined in Appendix 4.
Enquiries
Glencore Xstrata
Paul Smith (Investors) Charles Watenphul (Media) Martin Fewings (Investors) Claire Divver (Media)
+41 (0) 41 709 24 87 +41 (0) 41 709 2462 +44 20 7968 2893 +44 20 7968 2871
paul.smith charles.watenphul mfewings cdivver
@glencore.com @glencore.com @xstrata.com @xstrata.com
Elisa Morniroli (Investors) Caroline Yates (Investors) Alison Flynn
+41 (0) 41 709 2818 +44 20 7968 2878 +44 20 7968 2838
elisa.morniroli cyates aflynn
@glencore.com @xstrata.com @xstrata.com
PR Advisers
Finsbury Aura Financial
Guy Lamming +44 (0) 20 7251 3801 Michael Oke +44 (0) 20 7321 0000
Dorothy Burwell Stephen Breslin
Andy Mills
StockWell Communications
Philip Gawith +44 (0) 20 3370 0013
Financial Advisers to Glencore Financial Advisers to Xstrata
Citigroup Global Markets Limited Deutsche Bank (Joint Financial Adviser and Joint Corporate
Broker)
David Wormsley +44 20 7986 4000 Nigel Robinson +44 20 7545 3951
Simon Lindsay Khaled Fathallah +44 20 7545 6333
Nick Bowers (Corporate
Tom Reid Broking) +44 20 7547 6937
Morgan Stanley & Co. Limited J.P. Morgan Limited (Joint Financial Adviser and Joint
Corporate Broker)
Michel Antakly +44 20 7425 8000 Barry Weir +44 20 7588 2828
Laurence Hopkins Neil Passmore (Corporate
Broking)
Paul Baker
Goldman Sachs International (Joint Financial Adviser)
Brett Olsher
Nick Harper
Nomura International plc (Joint Financial Adviser)
William Vereker
William Barter
Further information
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Merger or otherwise nor shall there
be any sale, issuance or transfer of securities in any jurisdiction
in contravention of applicable law. The Merger will be made solely
by means of the New Scheme Document, which, together with the
Further Forms of Proxy, will contain the full terms and conditions
of the Merger including details of how to vote in respect of the
Merger. Xstrata will prepare the New Scheme Document to be
distributed to Xstrata Shareholders. Xstrata urges Xstrata
Shareholders to read the New Scheme Document when it becomes
available because it will contain important information in relation
to the Merger. Glencore will prepare the Further Glencore Circular
to be distributed to Glencore Shareholders. Glencore urges Glencore
Shareholders to read the Further Glencore Circular when it becomes
available because it will contain important information in relation
to the Merger. Any vote in respect of the New Scheme or other
response in relation to the Merger should be made only on the basis
on the information contained in the New Scheme Document.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Please be aware that addresses, electronic addresses and certain
other information provided by Xstrata Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Xstrata may be provided to Glencore during the
offer period as required under Section 4 of Appendix 4 of the Code
to comply with Rule 2.12(c).
Citigroup Global Markets Limited, which is authorised and
regulated in the United Kingdom by the FSA, is acting exclusively
for Glencore and no-one else in connection with the matters set out
in this announcement and will not be responsible to any person
other than Glencore for providing the protections afforded to
clients of Citigroup Global Markets Limited or for providing advice
in relation to the matters set out in this announcement.
Morgan Stanley & Co. Limited is acting as financial adviser
to Glencore and no one else in connection with the Merger and will
not be responsible to anyone other than Glencore for providing the
protections afforded to the clients of Morgan Stanley & Co.
Limited nor for providing advice in relation to the potential
Merger, the contents of this announcement or any other matter or
arrangement referred to herein.
Deutsche Bank AG is authorised under German Banking Law
(competent authority: BaFin - Federal Financial Supervisory
Authority) and authorised and subject to limited regulation by the
FSA. Details about the extent of Deutsche Bank AG's authorisation
and regulation by the FSA are available on request. Deutsche Bank
AG, London Branch is acting as financial adviser and corporate
broker to Xstrata and no one else in connection with the Merger and
will not be responsible to anyone other than Xstrata for providing
the protections afforded to clients of Deutsche Bank AG, London
Branch, nor for providing advice in relation to the Merger or for
any of the matters referred to in this announcement.
J.P. Morgan Limited, which conducts its UK investment banking
business as J.P. Morgan Cazenove and is authorised and regulated in
the United Kingdom by the FSA, is acting as financial adviser and
corporate broker to Xstrata and for no one else in connection with
the Merger and will not be responsible to anyone other than Xstrata
for providing the protections afforded to its clients nor for
providing advice in relation to the Merger of for any of the
matters set out in this announcement.
Goldman Sachs International, which is authorised and regulated
in the United Kingdom by the FSA, is acting as financial adviser to
Xstrata and for no one else in connection with the Merger and will
not be responsible to anyone other than Xstrata for providing the
protections afforded to clients of Goldman Sachs International nor
for providing advice in relation to the Merger, the content of this
announcement or any matter referred to herein.
Nomura International plc, which conducts its UK investment
banking business as Nomura and is authorised and regulated in the
United Kingdom by the FSA, is acting as financial adviser to
Xstrata and for no one else in connection with the matters set out
in this announcement and will not be responsible to anyone other
than Xstrata for providing the protections afforded to its clients
nor for providing advice in relation to the matters set out in this
announcement.
Barclays Bank PLC, acting through its investment bank
("Barclays"), which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial
adviser to Xstrata and no-one else in connection with the Merger
and will not regard any other person (whether or not a recipient of
this document) as a client in relation to the Merger and will not
be responsible to anyone other than Xstrata for providing the
protections afforded to its clients, nor for providing advice in
connection with the Merger or any other matter referred to
herein.
Notice to US holders of Xstrata Shares
The Merger will involve an exchange of the securities of a UK
company for the securities of a Jersey company and will be subject
to Jersey and UK disclosure requirements, which are different from
those of the United States. The financial information included in
this announcement has been prepared in accordance with
International Financial Reporting Standards and thus may not be
comparable to financial information of US companies or companies
whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States.
The Merger will be made by means of a scheme of arrangement
under the UK Companies Act and otherwise in accordance with the
requirements of the Code. The scheme of arrangement will relate to
the shares of a UK company that is a 'foreign private issuer' as
defined under Rule 3b-4 under the US Exchange Act.
Accordingly, the proposed combination will be subject to
disclosure and other procedural requirements applicable in the UK
to schemes of arrangement, which differ from the disclosure
requirements of the US proxy and tender offer rules under the US
Exchange Act.
Any securities to be issued under the Merger have not been and
will not be registered under the US Securities Act, or under the
securities laws of any state, district or other jurisdiction of the
United States, or of Australia, Canada or Japan. Accordingly such
securities may not be offered, sold or delivered, directly or
indirectly, in or into such jurisdictions except pursuant to
exemptions from applicable requirements of such jurisdictions. It
is expected that the New Glencore Shares will be issued in reliance
upon the exemption from such registration provided by Section
3(a)(10) of the US Securities Act. Under applicable US securities
laws, persons (whether or not US persons) who are or will be
"affiliates" (within the meaning of the US Securities Act) of
Xstrata or Glencore prior to, or of Glencore after, the Effective
Date will be subject to certain transfer restrictions relating to
the Glencore Shares received in connection with the New Scheme. It
may be difficult for US holders of Xstrata Shares to enforce their
rights and any claim arising out of the US federal securities laws,
since Glencore and Xstrata are located in a non-US jurisdiction,
and some or all of their officers and directors may be residents of
a non-US jurisdiction. US holders of Xstrata Shares may not be able
to sue a non-US company or its officers or directors in a non-US
court for violations of the US securities laws. Further, it may be
difficult to compel a non-US company and its affiliates to subject
themselves to a US court's judgment.
If Glencore elects, with the consent of the Panel (where
necessary) and with Xstrata's prior written consent, to implement
the Merger by way of a Merger Offer, the Merger will be made in
compliance with applicable US laws and regulations, including
applicable provisions of the tender offer rules under the US
Exchange Act, to the extent applicable.
Overseas jurisdictions
The availability of the Merger to Xstrata Shareholders who are
not resident in the UK may be affected by the laws of the relevant
jurisdictions in which they are located. Persons who are not
resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions.
Further details in relation to overseas shareholders will be
contained in the New Scheme Document.
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable requirements. Any failure to comply with
the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Merger disclaim any responsibility or liability for the
violation of such restrictions by any person. This announcement has
been prepared for the purposes of complying with English law, the
Listing Rules, the rules of the London Stock Exchange and the Code
and the information disclosed may not be the same as that which
would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
Unless otherwise determined by Glencore or required by the Code,
and permitted by applicable law and regulation, the Merger will not
be made, directly or indirectly, in, into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Merger by any
such use, means, instrumentality or form within a Restricted
Jurisdiction. Accordingly, copies of this announcement and formal
documentation relating to the Merger will not be and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in, into or from any Restricted Jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
this announcement and all documents relating to the Merger
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
Forward-looking statements
This announcement contains statements which are, or may be
deemed to be, "forward-looking statements" which are prospective in
nature. All statements other than statements of historical fact are
forward-looking statements. They are not based on current
expectations and projections about future events, and are therefore
subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied
by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes", "targets", "aims", "projects"
or words or terms of similar substance or the negative thereof, are
forward-looking statements, as well as variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Forward-looking statements include statements
relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of Glencore's or Xstrata's operations and
potential synergies resulting from the Merger; and (iii) the
effects of global economic conditions on Glencore's or Xstrata's
business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
the actual results, performance or achievements of Glencore or
Xstrata to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Important factors that could cause
actual results, performance or achievements of Glencore or Xstrata
to differ materially from the expectations of Glencore or Xstrata,
as applicable, include, among other things, general business and
economic conditions globally, commodity price volatility, industry
trends, competition, changes in government and other regulation,
including in relation to the environment, health and safety and
taxation, labour relations and work stoppages, changes in political
and economic stability, disruptions in business operations due to
reorganisation activities (whether or not Glencore combines with
Xstrata), interest rate and currency fluctuations, the failure to
satisfy any conditions for the Merger on a timely basis or at all,
the failure to satisfy the conditions of the Merger when
implemented (including approvals or clearances from regulatory and
other agencies and bodies) on a timely basis or at all, the failure
of Glencore to combine with Xstrata on a timely basis or at all,
the inability of the Combined Group to realise successfully any
anticipated synergy benefits when the Merger is implemented, the
inability of the Combined Group to integrate successfully
Glencore's and Xstrata's operations and programmes when the Merger
is implemented, the Combined Group incurring and/or experiencing
unanticipated costs and/or delays or difficulties relating to the
Merger when the Merger is implemented. Such forward-looking
statements should therefore be construed in light of such
factors.
Neither Xstrata nor Glencore, nor any of their respective
associates or directors, officers or advisers, provides any
representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in
this announcement will actually occur. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof.
Other than in accordance with its legal or regulatory
obligations (including under the Listing Rules and the Disclosure
and Transparency Rules of the FSA), neither Xstrata nor Glencore is
under any obligation and Xstrata and Glencore each expressly
disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecasts
No statement in this announcement is intended as a profit
forecast and no statement in this announcement should be
interpreted to mean that earnings per Glencore or Xstrata ordinary
share for the current or future financial years would necessarily
match or exceed the historical published earnings per Glencore or
Xstrata ordinary share.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (London time) on the business day following the date of
the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0) 20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website
A copy of this announcement will be available on Xstrata's
website at www.xstrata.com and on Glencore's website at
www.glencore.com.
You may request a hard copy of this announcement, free of
charge, by contacting the Company Secretary of Glencore, John
Burton, at john.burton@glencore.com or the Company Secretary of
Xstrata, Richard Elliston, at relliston@xstrata.com. You may also
request that all future documents, announcements and information to
be sent to you in relation to the Merger should be in hard copy
form.
Appendix 1
CONDITIONS AND CERTAIN FURTHER TERMS
OF THE NEW SCHEME AND THE MERGER
A. Conditions to the New Scheme and Merger
1 The Merger will be conditional upon the New Scheme becoming
unconditional and effective, subject to the Code, by not later than
31 December 2012 or such later date (if any) as Glencore and
Xstrata may, with the consent of the Panel, agree and (if required)
the Court may allow.
2 The New Scheme will be subject to the following conditions:
2.1 a resolution to approve the New Scheme being duly passed by
a majority in number of the Scheme Shareholders who are on the
register of members of Xstrata at the Scheme Voting Record Time,
and who are present and vote, whether in person or by proxy, at the
New Court Meeting and at any separate class meeting which may be
required (or any adjournment thereof) and who represent not less
than 75 per cent. in value of the Scheme Shares held by those
Scheme Shareholders, and such resolution becoming effective in
accordance with its terms;
2.2 the resolutions required to approve and implement the New
Scheme and Capital Reduction being duly passed by Xstrata
Shareholders representing 75 per cent. or more of the votes cast at
the Further Xstrata General Meeting; and
2.3 the sanction of the New Scheme by the Court (in each case
with or without modification but subject to any modification being
on terms acceptable to Xstrata and Glencore) and confirmation of
the Capital Reduction by the Court and (a) the delivery of copies
of the New Scheme Court Order and the Reduction Court Order and the
requisite Statement of Capital attached thereto to the Registrar of
Companies and (b) the registration of the Reduction Court
Order.
3 In addition, subject as stated in Part B below and to the
requirements of the Panel, the Merger will be conditional upon the
following Conditions and, accordingly, the necessary actions to
make the New Scheme effective will not be taken unless such
Conditions (as amended if appropriate) have been satisfied or,
where relevant, waived in writing:
Approval of Glencore Shareholders
(a) any resolution or resolutions of Glencore Shareholders
required to: (i) approve, effect and implement the Merger, (ii)
confer authorities for the issue and allotment of the New Glencore
Shares to be issued in connection with the Merger, and (iii) effect
such other actions as are required in connection with the
implementation of the Merger (as such resolutions may be set out in
the Further Glencore Circular), but excluding, for the avoidance of
doubt, relating to any change in Glencore's name being duly passed
at the Glencore General Meeting (or at any adjournment of that
meeting) in each case by the requisite majority of Glencore
Shareholders;
Admission of the New Glencore Shares
(b) the UK Listing Authority having acknowledged to Glencore or
its agent (and such acknowledgement not having been withdrawn) that
the application for the admission of the New Glencore Shares to the
Official List with a premium listing has been approved and (after
satisfaction of any conditions to which such approval is expressed
to be subject ("listing conditions")) will become effective as soon
as a dealing notice has been issued by the FSA and any listing
conditions having been satisfied and the London Stock Exchange
having acknowledged to Glencore or its agent (and such
acknowledgement not having been withdrawn) that the New Glencore
Shares will be admitted to trading;
EU merger control
(c) the European Commission indicating, in terms reasonably
satisfactory to Glencore, that it does not intend to initiate
proceedings under Article 6(1)(c) of the Council Regulation (EC)
No. 139/2004 (the "Regulation"), or to make a referral to a
competent authority in the EEA under Article 9(1) of such
Regulation, in either case with respect to the Merger or any matter
arising from the New Scheme or Merger;
US merger control
(d) all filings having been made in connection with the Merger
or any aspect of the Merger and all or any applicable waiting
periods (including any extensions thereof) having expired under the
United States Hart-Scott Rodino Antitrust Improvements Act of 1976,
as amended, and the regulations thereunder;
South African merger control
(e) the South African Competition Tribunal having approved
unconditionally or, if approved with conditions, on such conditions
reasonably satisfactory to Glencore, as expressed in writing, the
Merger in terms of Chapter 3 of the South African Competition
Act;
China merger control
(f) the Ministry of Commerce of the People's Republic of China
pursuant to the Anti-Monopoly Law of the People's Republic of China
(the "Anti-Monopoly Law") having cleared the Merger on terms
reasonably satisfactory to Glencore or all applicable waiting
periods under the Anti-Monopoly Law in respect of the review of the
Merger having expired;
Australian foreign investment approval
(g) one of the following having occurred:
(i) the Treasurer of the Commonwealth of Australia (or his
delegate) gives written advice without conditions that there are no
objections under Australia's foreign investment policy to the
Merger; or
(ii) after notice of the proposed Merger has been given by
Glencore to the Treasurer of the Commonwealth of Australia under
the Foreign Acquisitions and Takeovers Act 1975 (Cwlth), the
Treasurer ceases to be empowered to make any order under Part II of
that Act because of lapse of time;
Notifications, waiting periods and Authorisations
(h) other than in respect of Conditions 3(a) to (g), all
notifications, filings or applications which are necessary or
reasonably considered appropriate in connection with the Merger
having been made and all necessary waiting periods (including any
extensions thereof) under any applicable legislation or regulation
of any jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with in each case in respect of
the Merger and all Authorisations deemed necessary or reasonably
appropriate by Glencore in any jurisdiction for or in respect of
the Merger and, except pursuant to Chapter 3 of Part 28 of the UK
Companies Act, the acquisition or the proposed acquisition of any
shares or other securities in, or control or management of, Xstrata
or any other member of the Wider Xstrata Group by any member of the
Wider Glencore Group having been obtained in terms and in a form
reasonably satisfactory to Glencore from all appropriate Third
Parties or (without prejudice to the generality of the foregoing)
from any person or bodies with whom any member of the Wider Xstrata
Group or the Wider Glencore Group has
entered into contractual arrangements and all such
Authorisations necessary, appropriate or desirable to carry on the
business of any member of the Wider Xstrata Group in any
jurisdiction having been obtained and all such Authorisations
remaining in full force and effect at the time at which the Merger
becomes otherwise wholly unconditional and there being no notice or
intimation of an intention to revoke, suspend, restrict, modify or
not to renew such Authorisations;
General antitrust and regulatory
(i) no antitrust regulator or Third Party having given notice of
a decision to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference (and in each
case, not having withdrawn the same), or having required any action
to be taken or otherwise having done anything, or having enacted,
made or proposed any statute, regulation, decision, order or change
to published practice (and in each case, not having withdrawn the
same) and there not continuing to be outstanding any statute,
regulation, decision or order which would or might reasonably be
expected to (in any case which is material in the context of the
Merger):
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider Glencore Group or by any member of the Wider
Xstrata Group of all or any material part of its businesses, assets
or property or impose any limitation on the ability of all or any
of them to conduct their businesses (or any part thereof) or to
own, control or manage any of their assets or properties (or any
part thereof);
(ii) require any member of the Wider Glencore Group or the Wider
Xstrata Group to acquire or offer to acquire any shares, other
securities (or the equivalent) or interest in any member of the
Wider Xstrata Group or any asset owned by any Third Party (other
than in the implementation of the Merger);
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Glencore Group directly or
indirectly to acquire, hold or to exercise effectively all or any
rights of ownership in respect of shares or other securities in
Xstrata or on the ability of any member of the Wider Xstrata Group
or any member of the Wider Glencore Group directly or indirectly to
hold or exercise effectively all or any rights of ownership in
respect of shares or other securities (or the equivalent) in, or to
exercise voting or management control over, any member of the Wider
Xstrata Group;
(iv) otherwise adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider Xstrata
Group or any member of the Wider Glencore Group;
(v) result in any member of the Wider Xstrata Group or any
member of the Wider Glencore Group ceasing to be able to carry on
business under any name under which it presently carries on
business;
(vi) make the Merger, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or
control or management of, Xstrata by any member of the Wider
Glencore Group void, unenforceable and/or illegal under the laws of
any relevant jurisdiction, or otherwise, directly or indirectly
prevent or prohibit, restrict, restrain, or delay the same or
otherwise interfere with the implementation of, or impose material
additional conditions or obligations with respect to, or otherwise
challenge, impede, interfere or require amendment of the Merger or
the acquisition or proposed acquisition of any shares or other
securities in, or control or management of, Xstrata by any member
of the Wider Glencore Group;
(vii) require, prevent or materially delay a divestiture by any
member of the Wider Glencore Group of any shares or other
securities (or the equivalent) in any member of the Wider Xstrata
Group or any member of the Wider Glencore Group; or
(viii) impose any material limitation on the ability of any
member of the Wider Glencore Group or any member of the Wider
Xstrata Group to conduct, integrate or co-ordinate all or any part
of its business with all or any part of the business of any other
member of the Wider Glencore Group and/or the Wider Xstrata
Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such antitrust regulator or
Third Party could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or
reference or take any other step under the laws of any jurisdiction
in respect of the Merger or the acquisition or proposed acquisition
of any Xstrata Shares or otherwise intervene having expired, lapsed
or been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
(j) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Xstrata Group is a
party or by or to which any such member or any of its assets is or
may be bound, entitled or subject or any event or circumstance
which, as a consequence of the Merger or because of a change in the
control or management of any member of the Wider Xstrata Group,
could or might reasonably be expected to result in (in any case to
an extent which is or would be material in the context of the Wider
Xstrata Group taken as a whole):
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider
Xstrata Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the Wider Xstrata Group or any
such mortgage, charge or other security interest (whenever created,
arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Wider Xstrata Group being adversely modified or adversely affected
or any obligation or liability arising or any adverse action being
taken or arising thereunder;
(iv) any liability of any member of the Wider Xstrata Group to
make any severance, termination, bonus or other payment to any of
its directors, or other officers;
(v) the rights, liabilities, obligations, interests or business
of any member of the Wider Xstrata Group under any such
arrangement, agreement, licence, permit, lease or instrument or the
interests or business of any member of the Wider Xstrata Group in
or with any other person or body or firm or company (or any
arrangement or arrangement relating to any such interests or
business) being or becoming capable of being terminated, or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
(vi) any member of the Wider Xstrata Group ceasing to be able to
carry on business under any name under which it presently carries
on business;
(vii) the value of, or the financial or trading position or
prospects of, any member of the Wider Xstrata Group being
prejudiced or adversely affected; or
(viii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider Xstrata Group other than
trade creditors or other liabilities incurred in the ordinary
course of business,
and no event having occurred which, under any provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Xstrata Group is a
party or by or to which any such member or any of its assets are
bound, entitled or subject, would or might reasonably be expected
to result in any of the events or circumstances as are referred to
in Conditions (j)(i) to (viii) (in any case to an extent which is
or would be material in the context of the Wider Xstrata Group
taken as a whole);
Certain events occurring since 31 December 2011
(k) except as Disclosed, no member of the Wider Xstrata Group having since 31 December 2011:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of Xstrata
Shares out of treasury (except, where relevant, as between Xstrata
and wholly owned subsidiaries of Xstrata or between the wholly
owned subsidiaries of Xstrata and except for the issue or transfer
out of treasury of Xstrata Shares on the exercise of employee share
options or vesting of employee share awards in the ordinary course
under the Xstrata Share Schemes);
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than (a)
the Xstrata 2011 Final Dividend, (b) the Xstrata 2012 Interim
Dividend, and (c) dividends (or other distributions whether payable
in cash or otherwise) lawfully paid or made by any wholly owned
subsidiary of Xstrata to Xstrata or any of its wholly owned
subsidiaries;
(iii) other than pursuant to the Merger (and except for
transactions between Xstrata and its wholly owned subsidiaries or
between the wholly owned subsidiaries of Xstrata and transactions
in the ordinary course of business) implemented, effected,
authorised or proposed or announced its intention to implement,
effect, authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is
material in the context of the Wider Xstrata Group taken as a
whole;
(iv) (except for transactions between Xstrata and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Xstrata) disposed of, or transferred, mortgaged or created any
security interest over any material asset or any right, title or
interest in any material asset or authorised, proposed or announced
any intention to do so which in any case is material in the context
of the Wider Xstrata Group taken as a whole;
(v) (except for transactions between Xstrata and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Xstrata) issued, authorised or proposed or announced an intention
to authorise or propose, the issue of or made any change in or to
the terms of any debentures or become subject to any contingent
liability or incurred or increased any indebtedness which in any
case is material in the context of the Wider Xstrata Group taken as
a whole;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract,
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise) which is of a long
term, unusual or onerous nature or magnitude or which is or which
involves or could involve an obligation of a nature or magnitude
which is likely to be restrictive on the business of any member of
the Wider Xstrata Group and which in any case is material in the
context of the Wider Xstrata Group taken as a whole;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement,
commitment or arrangement with any director or senior executive of
any member of the Wider Xstrata Group save as agreed by
Glencore;
(viii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any employee of the
Wider Xstrata Group save as agreed by Glencore;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, except in respect of the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital, save as agreed by Glencore in writing;
(x) waived, compromised or settled any claim (other than in the
ordinary course of business) which is material in the context of
the Wider Xstrata Group taken as a whole;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Xstrata Group and any
other person in a manner which would or might reasonably be
expected to have a material adverse effect on the financial
position of the Wider Xstrata Group taken as a whole;
(xii) made any alteration to its memorandum or articles of
association or other incorporation documents in each case which is
material in the context of the Merger;
(xiii) made or agreed or consented to any change to the terms of
the trust deeds and rules constituting the pension scheme(s)
established for its directors, employees or their dependants or any
material change to the benefits which accrue, or to the pensions
which are payable, thereunder, or to the basis on which
qualification for, or accrual or entitlement to, such benefits or
pensions are calculated or determined or to the basis upon which
the liabilities (including pensions) of such pension schemes are
funded or made, or agreed or consented to, in each case which is
material in the context of the Wider Xstrata Group taken as a
whole;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business, in
each case which is material in the context of the Wider Xstrata
Group taken as a whole;
(xv) (other than in respect of a member of the Wider Xstrata
Group which is dormant and was solvent at the relevant time) taken
or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its
winding-up (voluntary or otherwise), dissolution, reorganisation or
for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any
material part of its assets or revenues or any analogous or
equivalent steps or proceedings in any jurisdiction or appointed
any analogous person in any jurisdiction or had any such person
appointed, in each case which is material in the context of the
Wider Xstrata Group taken as a whole;
(xvi) (except for transactions between Xstrata and its wholly
owned subsidiaries or between the wholly owned subsidiaries), made,
authorised, proposed or announced an intention to propose any
change in its loan capital, in each case which is material in the
context of the Wider Xstrata Group taken as a whole;
(xvii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, in each case which is
material in the context of the Wider Xstrata Group taken as a
whole; or
(xviii) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition (k);
No adverse change, litigation, regulatory enquiry or similar
(l) except as Disclosed, since 31 December 2011 there having been:
(i) no adverse change or deterioration and no circumstance
having arisen which would or might be reasonably expected to result
in any adverse change in, the business, assets, financial or
trading position or profits or prospects or operational performance
of any member of the Wider Xstrata Group which in any case is
material in the context of the Wider Xstrata Group taken as a
whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or
instituted by or against or remaining outstanding against or in
respect of, any member of the Wider Xstrata Group or to which any
member of the Wider Xstrata Group is or may become a party (whether
as claimant, defendant or otherwise), in each case which might
reasonably be expected to have a material adverse effect on the
Wider Xstrata Group taken as a whole or in the context of the
Merger;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider Xstrata Group having been threatened, announced or
instituted or remaining outstanding by, against or in respect of
any member of the Wider Xstrata Group, in each case which might
reasonably be expected to have a material adverse effect on the
Wider Xstrata Group taken as a whole or in the context of the
Merger;
(iv) no contingent or other liability having arisen or become
apparent to Glencore or increased other than in the ordinary course
of business which would or might reasonably be expected to
adversely affect the business, assets, financial or trading
position or profits or prospects of any member of the Wider Xstrata
Group to an extent which is material in the context of the Wider
Xstrata Group taken as a whole or in the context of the Merger;
and
(v) no steps having been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Xstrata Group which is necessary for the proper carrying
on of its business and the withdrawal, cancellation, termination or
modification of which might reasonably be expected to have a
material adverse effect on the Wider Xstrata Group taken as a whole
or in the context of the Merger;
No discovery of certain matters regarding information,
liabilities and environmental issues
(m) except as Disclosed, Glencore not having discovered:
(i) that any financial, business or other information concerning
the Wider Xstrata Group Publicly Announced prior to the date of
this announcement or disclosed at any time to any member of the
Wider Glencore Group or to any of their advisers by or on behalf of
any member of the Wider Xstrata Group prior to the date of this
announcement is misleading, contains a misrepresentation of any
fact, or omits to state a fact necessary to make that information
not misleading, to an extent which in any such case is material in
the context of the Wider Xstrata Group taken as a whole;
(ii) that any member of the Wider Xstrata Group or any
partnership, company or other entity in which any member of the
Wider Xstrata Group has a significant economic interest and which
is not a subsidiary undertaking of Xstrata is, otherwise than in
the ordinary course of business, subject to any liability,
contingent or otherwise and which is material in the context of the
Wider Xstrata Group taken as a whole or in the context of the
Merger;
(iii) that any past or present member of the Wider Xstrata Group
has not complied in any material respect with all applicable
legislation, regulations or other requirements of any jurisdiction
or any Authorisations relating to the use, treatment, storage,
carriage, disposal, discharge, spillage, release, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment (including property) or harm human or animal
health or otherwise relating to environmental matters or the health
and safety of humans, which non-compliance would be likely to give
rise to any liability including any penalty for non-compliance
(whether actual or contingent) on the part of any member of the
Wider Xstrata Group which in any case is material in the context of
the Wider Xstrata Group taken as a whole;
(iv) that there has been a material disposal, discharge,
spillage, accumulation, release, leak, emission or the migration,
production, supply, treatment, storage, transport or use of any
waste or hazardous substance or any substance likely to impair the
environment (including any property) or harm human or animal health
which (whether or not giving rise to non-compliance with any law or
regulation), would be likely to give rise to any liability (whether
actual or contingent) on the part of any member of the Wider
Xstrata Group which in any case is material in the context of the
Wider Xstrata Group taken as a whole;
(v) that there is or is reasonably likely to be any obligation
or liability (whether actual or contingent) or requirement to make
good, remediate, repair, reinstate or clean up any property, asset
or any controlled waters currently or previously owned, occupied,
operated or made use of or controlled by any past or present member
of the Wider Xstrata Group (or on its behalf), or in which any such
member may have or previously have had or be deemed to have had an
interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto
which in any case is material in the context of the Wider Xstrata
Group taken as a whole; or
(vi) that circumstances exist (whether as a result of making the
Merger or otherwise) which would be reasonably likely to lead to
any Third Party instituting (or whereby any member of the Wider
Xstrata Group would be likely to be required to institute), an
environment audit or take any steps which would in any such case be
reasonably likely to result in any actual or contingent liability
to improve or install new plant or equipment or to make good,
repair, reinstate or clean up any property of any description or
any asset now or previously owned, occupied or made use of by any
past or present member of the Wider Xstrata Group (or on its
behalf) or by any person for which a member of the Wider Xstrata
Group is or has been responsible, or in which any such member may
have or previously have had or be deemed to have had an interest,
which in any case is material in the context of the Wider Xstrata
Group taken as a whole.
B. Certain further terms of the New Scheme and the Merger
Subject to the requirements of the Panel, Glencore reserves the
right to waive in whole or in part, all or any of the above
Conditions 3(a) to (m) (inclusive), other than Condition 3(b).
The New Scheme will not become effective unless the Conditions
have been fulfilled or (if capable of waiver) waived or, where
appropriate, have been determined by Glencore to be or remain
satisfied by no later than the date referred to in Condition 1 (or
such later date as Glencore and Xstrata may, with the consent of
the Panel, agree and (if required) the Court may allow).
If Glencore is required by the Panel to make an offer for
Xstrata Shares under the provisions of Rule 9 of the Code, Glencore
may make such alterations to any of the above Conditions and terms
of the Merger as are necessary to comply with the provisions of
that Rule.
The New Scheme will be governed by the law of England and Wales.
The Merger will be on and subject to the conditions and certain
further terms set in this Appendix 1 and to be set out in the New
Scheme Document. The New Scheme will be subject to applicable
requirements of the Code, the Panel, the London Stock Exchange, the
FSA and the UK Listing Authority.
Glencore shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of Conditions 3(a) to (m) (inclusive) by a date
earlier than the latest date for thefulfilmentof that Condition
notwithstanding that the other Conditions of the Merger may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
Glencore reserves the right to elect, with the consent of the
Panel (where necessary) and with Xstrata's prior written consent,
to implement the Merger by way of a Merger Offer. In such event,
the acquisition will be implemented on substantially the same terms
subject to appropriate amendments, so far as applicable, as those
which would apply to the New Scheme. In addition, the voting
structure of the New Scheme may be amended if required by the Court
or otherwise only with each of Xstrata's and Glencore's written
consent and, in each case, with the consent of the Panel (where
necessary).
The Merger will lapse if the European Commission either
initiates proceedings under Article 6(1)(c) of the Regulation or
makes a referral to a competent authority of the United Kingdom
under Article 9(1) of the Regulation and there is a reference to
the Competition Commission before the date of the New Court
Meeting.
The availability of the Merger to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
The Merger is not being made, directly or indirectly, in, into
or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any jurisdiction where to do so would
violate the laws of that jurisdiction.
Under Rule 13.5 of the Code, Glencore may not invoke a condition
to the Merger so as to cause the Merger not to proceed, to lapse or
to be withdrawn unless the circumstances which give rise to the
right to invoke the condition are of material significance to
Glencore in the context of the offer. The conditions contained in
paragraphs 1, 2 and 3(a) and (c) of Part A are not subject to this
provision of the Code.
The Merger is governed by the law of England and Wales and is
subject to applicable requirements of the Code, the Panel, the
London Stock Exchange, the FSA, the UK Listing Authority, the
jurisdiction of the English courts and to the Conditions and
certain further terms set out in this Appendix 1 and to be set out
in the New Scheme Document.
Appendix 2
Bases and Sources
a) Unless otherwise stated, all prices quoted for Xstrata Shares
and Glencore Shares are closing mid-market prices and are derived
from the Daily Official List.
b) The US$/GBP exchange rate of US$1.61/GBP1.00 used in this
document is the Bloomberg rate as at 5.00 p.m. London time on 28
September 2012 (being the last practicable date prior to the
publication of this document).
c) As at the close of business on 28 September 2012 the number
of Glencore Shares in issue was 6,922,713,511. The International
Securities Identification Number for Glencore Shares is
JE00B4T3BW64.
d) As at the close of business on 28 September 2012 the number
of Xstrata Shares in issue was 3,002,692,076. (Of this number,
1,010,403,999 Xstrata Shares were owned by the Glencore Group and
49,368,447 Xstrata Shares were held by certain entities connected
with Xstrata that hold Xstrata Shares for the purpose of satisfying
Xstrata Shares to be issued pursuant to the Xstrata Share Schemes.)
The International Securities Identification Number for Xstrata
Shares is GB0031411001 and the Swiss Security Number is 1386
215.
e) The value of 1,046.46 pence per Xstrata Share implied by the
terms of the Merger is calculated based on the exchange ratio of
3.05 New Glencore Shares for each Xstrata Share held and the
closing price per Glencore Share of 343.10 pence on 28 September
2012 (being the last practicable date prior to the date of this
announcement).
f) As at the close of business on 28 September 2012 the fully
diluted number of Xstrata Shares is 3,052,071,090. This
comprises:
(i) the number of Xstrata Shares in issue set out in paragraph
d)above, plus
(ii) 78,341,569 Xstrata Shares to be issued pursuant to the
Xstrata Share Schemes; less
(iii) the number of Xstrata Shares held by certain entities
connected to Xstrata referred to in d) that hold Xstrata Shares for
the purpose of satisfying Xstrata Shares to be issued pursuant to
the Xstrata Share Schemes; plus
(iv) the maximum number of Xstrata Shares needed to satisfy the
retention share awards of 20,405,892 Xstrata Shares.
g) The value of GBP31.9 billion for Xstrata's issued and to be
issued share capital implied by the terms of the Merger is
calculated on the basis of the value placed on each Xstrata Share
referred to in paragraph e)above multiplied by the fully diluted
number of Xstrata Shares referred to in paragraph f).
h) The number of New Glencore Shares of 6,227,084,628 to be
issued in connection with the merger is based on the exchange ratio
of 3.05 New Glencore Shares in respect of 2,041,667,091 Scheme
Shares, which consist of:
(i) the number of fully diluted Xstrata Shares referred to in
paragraph f); less
(ii) the number of Xstrata Shares owned by the Glencore Group
referred to in paragraph d).
i) The exchange ratio of 2.59 implied by the middle market
closing prices of Xstrata and Glencore on 1 February 2012 (being
the last practicable date prior to the announcement by Xstrata that
it was in discussions with Glencore) is calculated based on the
daily ratios of the closing price per Xstrata Share divided by the
closing price per Glencore Share.
j) The exchange ratio of 2.43 being the average of the ratios
implied by the middle market closing prices of Xstrata and Glencore
between 3 September and 6 September 2012 (the latter being the last
business day prior to the announcement by Xstrata of the revised
proposal from Glencore) is calculated based on the daily ratios of
the closing price per Xstrata Share divided by the closing price
per Glencore Share.
k) The lowest ratio of 1.92 implied by the middle market closing
prices of Xstrata and Glencore between Glencore's IPO on 19 May
2011 and 1 February 2012 (being the last practicable date prior to
the announcement by Xstrata that it was in discussions with
Glencore) is calculated based on the daily ratios of the closing
price per Xstrata Share divided by the closing price per Glencore
Share.
l) The highest ratio of 2.90 implied by the middle market
closing share prices of Xstrata and Glencore between Glencore's IPO
on 19 May 2011 and 1 February 2012 (being the last practicable date
prior to the announcement by Xstrata that it was in discussions
with Glencore) is calculated based on the daily ratios of the
closing price per Xstrata Share divided by the closing price per
Glencore Share.
m) The US$500 million synergy number is unaudited and are based
on analysis by Glencore's and Xstrata's management and on Xstrata's
unaudited results for the year ended 31 December 2011 and
Glencore's internal records as at 6 February 2012.
n) Unless otherwise stated, the financial information concerning
Xstrata has been extracted from the audited annual report and
accounts for the year ended 31 December 2011 or the interim report
for the half year ended 30 June 2012 for Xstrata for the relevant
period.
o) Unless otherwise stated, the financial information concerning
Glencore has been extracted from the audited annual report and
accounts for the year ended 31 December 2011 or the interim report
for the half year ended 30 June 2012 for Glencore for the relevant
period.
Appendix 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
Irrevocable undertakings in respect of Xstrata Shares
The following persons have given irrevocable undertakings to
vote in favour of the New Scheme at the New Court Meeting and the
resolutions to be proposed at the Further Xstrata General Meeting
in accordance with the recommendation of the Independent Xstrata
Non-Executive Directors in relation to the following Xstrata
Shares:
Name Number of Xstrata Percentage of issued
Shares ordinary share capital
of Xstrata (per cent.)
Sir John Bond 1,000 0.000033
Mick Davis 2,517,549 0.083843
Trevor Reid 647,365 0.021559
Claude Lamoureux 27,000 0.000899
David Rough 25,249 0.000841
Ian Strachan 43,098 0.001435
Santiago Zaldumbide 258,126 0.008596
The undertakings shall only lapse if Glencore announces, with
the consent of the Panel, that it does not intend to make or
proceed with the Merger and no new, revised or replacement scheme
of arrangement is announced in accordance with Rule 2.7 of the Code
at the same time; or if the New Scheme lapses or is withdrawn and
no new, revised or replacement scheme of arrangement has been
announced, in accordance with Rule 2.7 of the Code, in its place or
is announced, in accordance with Rule 2.7 of the Code, at the same
time.
Irrevocable undertakings in respect of Glencore Shares
The following persons have given irrevocable undertakings to
vote in favour of the resolution to be proposed at the Glencore
General Meeting to approve the Merger and related resolutions to be
proposed at the Glencore General Meeting in relation to the
following Glencore Shares:
Name Number of Glencore Percentage of issued
Shares ordinary share capital
of Glencore (per
cent.)
Ivan Glasenberg 1,101,848,752 15.916429
Steven Kalmin 70,523,154 1.018721
Peter Coates 82,700 0.001195
Li Ning 123,000 0.001777
Daniel Francisco
Maté Badenes 417,468,330 6.030415
Aristotelis Mistakidis 414,730,597 5.990868
Tor Peterson 366,074,885 5.288026
Alex Beard 320,260,410 4.626227
The undertakings shall only lapse if Glencore announces, with
the consent of the Panel, that it does not intend to make or
proceed with the Merger and no new, revised or replacement scheme
of arrangement is announced in accordance with Rule 2.7 of the Code
at the same time; if Glencore announces that it has withdrawn its
recommendation to shareholders to vote in favour of the resolutions
to be proposed at the Glencore General Meeting; or if the New
Scheme lapses or is withdrawn and no new, revised or replacement
scheme of arrangement has been announced, in accordance with Rule
2.7 of the Code, in its place or is announced, in accordance with
Rule 2.7 of the Code, at the same time.
Appendix 4
Definitions
The following definitions apply throughout this announcement
unless the context requires otherwise.
"$", "US$" or "cents" the lawful currency of the US
"GBP", "Sterling", the lawful currency of the UK
"pence" or "p"
"Admission" the New Glencore Shares being admitted
to the Official List and to trading
on the London Stock Exchange's market
for listed securities
"Australia" the Commonwealth of Australia, its
territories and possessions
"Authorisations" material authorisations, orders, recognitions,
grants, consents, clearances, confirmations,
certificates, licenses, permissions
and approvals
"Break Fee Agreement" the reverse break fee agreement entered
into by Glencore and Xstrata on 7
February 2012
"Break Fee Amendment the amendment agreement, in relation
Agreement" to the reverse break fee agreement,
entered into by Glencore and Xstrata
on 1 October 2012
"business day" a day (other than a Saturday, Sunday,
UK public or bank holiday) on which
banks are generally open for the transaction
of business in London
"Canada" Canada, its provinces and territories
and all areas under its jurisdiction
and political sub--divisions thereof
"Capital Reduction" the proposed reduction of Xstrata's
share capital under Chapter 10 of
Part 17 of the UK Companies Act, to
be effected as part of the New Scheme
"CEO" Chief Executive Officer
"Code" the City Code on Takeovers and Mergers
"Combined Group" the combined group following the Merger,
comprising the Glencore Group and
the Xstrata Group
"Combined Entity" the ultimate parent company of the
Combined Group
"Conditions" the conditions to the implementation
of the Merger (including the New Scheme)
as set out in Appendix 1 to this announcement
and to be set out in the New Scheme
Document
"Confidentiality Agreement" the mutual confidentiality agreement
entered into by Glencore and Xstrata
on 12 December 2011
"Court" the High Court of Justice of England
and Wales
"CREST" the relevant system (as defined in
the Uncertificated Securities Regulations
2001 (SI 2001/3755)) in respect of
which Euroclear UK & Ireland Limited
is the Operator (as defined in such
Regulations) in accordance with which
securities may be held and transferred
in uncertificated form
"Daily Official List" the daily official list of the London
Stock Exchange
"Dealing Disclosure" an announcement pursuant to Rule 8
of the Code containing details of
dealings in interests in relevant
securities of a party to an offer
"Disclosed" (i) fairly disclosed in Xstrata's
annual reports and accounts for the
year ended 31 December 2011, (ii)
Publicly Announced, or (iii) fairly
disclosed to Glencore or its financial,
legal or accounting advisers (specifically
in their capacity as Glencore's advisers
in relation to the Merger) by or on
behalf of Xstrata prior to the date
of this announcement
"Disclosure and Transparency the disclosure and transparency rules
Rules" of the FSA made in accordance with
section 73A of the FSMA, as amended
from time to time
"EBIT" earnings before interest and tax
"EBITDA" earnings before interest, tax, depreciation
and amortisation
"EEA" European Economic Area
"Effective Date" the date upon which the New Scheme
becomes effective in accordance with
its terms
"Excluded Shares" (i) any Xstrata Shares beneficially
owned by Glencore or any other member
of the Glencore Group; (ii) any Xstrata
Shares held in treasury by Xstrata;
and (iii) any other Xstrata Shares
which Glencore and Xstrata agree (subject
to the consent of the Court) will
not be subject to the New Scheme
"FSA" the Financial Services Authority
"Further Forms of Proxy" the form of proxy in connection with
each of the New Court Meeting and
the Further Xstrata General Meeting,
which shall accompany the New Scheme
Document
"Further Glencore Circular" the circular to be sent to Glencore
Shareholders in connection with the
final revised terms of the Merger
"Further Xstrata General the extraordinary general meeting
Meeting" of Xstrata to be convened in connection
with the New Scheme / the Capital
Reduction and the Revised Management
Incentive Arrangements, notice of
which will be set out in the New Scheme
Document, including any adjournment
thereof
"Glencore" Glencore International plc
"Glencore Change in a withdrawal, amendment, modification
Recommendation" or qualification to the Glencore board's
recommendation of the Merger or the
resolution or agreement to do the
same
"Glencore Circular" the circular sent to Glencore Shareholders
in connection with the Merger on 31
May 2012
"Glencore Directors" the board of directors of Glencore
at the date of this announcement
"Glencore General Meeting" the general meeting of Glencore to
be convened in connection with the
Merger, notice of which will be set
out in the Further Glencore Circular,
including any adjournment thereof
"Glencore Group" Glencore and its subsidiary undertakings
"Glencore Nominee Directors" Ivan Glasenberg, Aristotelis Mistakidis
and Tor Peterson, the Xstrata Directors
nominated by Glencore
"Glencore Shareholders" holders of Glencore Shares
"Glencore Shares" fully paid up ordinary shares of $0.01
each in the capital of Glencore
"Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited
"Independent Xstrata the Independent Xstrata Directors
Non-Executive Directors" other than the Xstrata Executive Directors
"Independent Xstrata the directors of Xstrata other than
Directors" the Glencore Nominee Directors
"International Financial the international financial reporting
Reporting Standards" standards issued by the International
Accounting Standards Board
"IPO" initial public offering
"Japan" Japan, its cities, prefectures, territories
and possessions
"Jersey" the Bailiwick of Jersey
"Listing Rules" the rules and regulations made by
the UK Listing Authority, and contained
in the UK Listing Authority's publication
of the same name
"London Stock Exchange" London Stock Exchange plc
"Long Term Incentive the Xstrata plc 2002 long term incentive
Plan" plan
"Management Incentive those elements of the retention and
Arrangements" incentive arrangements previously
proposed to be put in place for those
members of Xstrata management who
are interested in Xstrata Shares details
of which were set out in the Original
Scheme Document and the Supplementary
Scheme Document
"Merger" the direct or indirect acquisition
of the entire issued and to be issued
share capital of Xstrata by Glencore
(other than Xstrata Shares already
held by Glencore) to be implemented
by way of the New Scheme or (should
Glencore so elect, subject to the
consent of the Panel (where necessary)
and with Xstrata's prior written consent)
by way of a Merger Offer
"Merger Offer" the implementation of the Merger by
means of a takeover offer under section
974 of the UK Companies Act, rather
than by means of the New Scheme
"New Court Meeting" the meeting(s) of the Scheme Shareholders
to be convened by order of the Court
pursuant to section 896 of the UK
Companies Act, notice of which will
be set out in the New Scheme Document,
for the purpose of approving the New
Scheme, including any adjournment
thereof
"New Glencore Shares" the new Glencore Shares to be issued
and credited to Xstrata Shareholders
pursuant to the New Scheme
"New Scheme" a scheme of arrangement proposed to
be made under Part 26 of the UK Companies
Act between Xstrata and the Scheme
Shareholders, with or subject to any
modification, addition or condition
approved or imposed by the Court and
agreed to by Xstrata and Glencore
"New Scheme Court Order" the order of the Court sanctioning
the New Scheme under Part 26 of the
UK Companies Act
"New Scheme Document" the document to be posted or made
available to (among others) Xstrata
Shareholders containing and setting
out, among other things, the full
terms and conditions of the New Scheme
and containing the notices convening
the New Court Meeting and Further
Xstrata General Meeting
"Official List" the official list of the UK Listing
Authority
"Opening Position Disclosure" an announcement pursuant to Rule 8
of the Code containing details of
certain persons' interests in relevant
securities of a party to an offer
"Original Scheme" the scheme of arrangement originally
proposed to be made under Part 26
of the UK Companies Act between Xstrata
and the Scheme Shareholders, with
or subject to any modification, addition
or condition approved or imposed by
the Court and agreed to by Xstrata
and Glencore
"Original Scheme Document" the document sent to Xstrata Shareholders
on 31 May 2012 containing and setting
out, among other things, the full
terms and conditions of the Original
Scheme
"Panel" the Panel on Takeovers and Mergers
"Principal Shareholders" Steven Kalmin, Daniel Francisco Maté
Badenes, Aristotelis Mistakidis, Tor
Peterson and Alex Beard
"Prospectus Rules" the rules for the purposes of Part
6 of the Financial Services and Markets
Act 2000 in relation to the offers
of securities to the public and the
admission of securities to trading
on a regulated market
"Publicly Announced" fairly disclosed in any public announcement
by Xstrata to any Regulatory Information
Service
"Reduction Court Hearing" the hearing by the Court of the application
to confirm the Capital Reduction
"Reduction Court Order" the order of the Court, to be granted
at the Reduction Court Hearing, confirming
the Capital Reduction
"Registrar of Companies" the Registrar of Companies in England
and Wales
"Restricted Jurisdiction" any such jurisdiction where local
laws or regulations may result in
significant risk of civil, regulatory
or criminal exposure if information
concerning the Merger is sent or made
available to Xstrata Shareholders
in that jurisdiction (in accordance
with Rule 30.3 of the Code)
"Revised Management those elements of the revised retention
Incentive Arrangements" and incentive arrangements set out
in this announcement which are proposed
to be put in place for those members
of Xstrata management who are interested
in Xstrata Shares and which will be
voted on by the eligible Xstrata Shareholders
at the Further Xstrata General Meeting
"Revised Management the ordinary resolution to be put
Incentive Arrangements to eligible Xstrata Shareholders at
Resolution" the Further Xstrata General Meeting
to approve the Revised Management
Incentive Arrangements
"Scheme Record Time" the time and date specified in the
New Scheme Document, expected to be
6.00 p.m. on the business day immediately
prior to the Effective Date
"Scheme Shareholders" holders of Scheme Shares
"Scheme Shares" Xstrata Shares:
(a) in issue as at the date of the
New Scheme Document;
(b) (if any) issued after the date
of the New Scheme Document and prior
to the Scheme Voting Record Time;
and
(c) (if any) issued on or after the
Scheme Voting Record Time and at or
prior to the Scheme Record Time either
on terms that the original or any
subsequent holders thereof shall be
bound by the New Scheme or in respect
of which the holders thereof shall
have agreed in writing to be bound
by the New Scheme,
but in each case other than the Excluded
Shares
"Scheme Voting Record the time and date specified in the
Time" New Scheme Document by reference to
which entitlement to vote on the New
Scheme will be determined
"SIX" SIX Swiss Exchange AG
"Statement of Capital" the statement of capital (approved
by the Court) showing, with respect
to Xstrata's share capital, as altered
by the Reduction Court Order, the
information required by section 649
of the UK Companies Act
"Supplementary Scheme the supplement to the Original Scheme
Document" Document published by Xstrata on 8
August 2012 in connection with certain
amendments to the Management Incentive
Arrangements (among other matters)
"Third Party" a central bank, government or governmental,
quasi-governmental, supranational,
statutory, regulatory, environmental
or investigative body, court, trade
agency, professional association,
institution, employee representative
body or any other such body or person
whatsoever in any jurisdiction
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"UK Companies Act" the UK Companies Act 2006, as amended
from time to time
"UK Corporate Governance the UK Corporate Governance Code,
Code" published in May 2010 by the Financial
Reporting Council, as amended from
time to time
"UK Listing Authority" the FSA acting in its capacity as
the competent authority for listing
under the Financial Services and Markets
Act 2000
"United States of America", the United States of America, its
"United States" or territories and possessions, any state
"US" of the United States and the District
of Columbia
"US Exchange Act" the United States Securities Exchange
Act of 1934 and the rules and regulations
promulgated thereunder
"US Securities Act" the United States Securities Act of
1933 and the rules and regulations
promulgated thereunder (as amended)
"Wider Glencore Group" Glencore and its subsidiaries, subsidiary
undertakings and associated undertakings
and any other body corporate, partnership,
joint venture or person in which Glencore
and such undertakings (aggregating
their interests) have a direct or
indirect interest of 20 per cent.
or more of the voting or equity capital
or the equivalent
"Wider Xstrata Group" Xstrata, its subsidiaries, subsidiary
undertakings and associated undertakings
and any other body corporate, partnership,
joint venture or person in which Xstrata
and such undertakings (aggregating
their interests) have a direct or
indirect interest of 20 per cent.
or more of the voting or equity capital
or the equivalent
"Xstrata" Xstrata plc
"Xstrata 2011 Final the Xstrata final dividend in respect
Dividend" of the 2011 financial year of $0.27
per Xstrata Share
"Xstrata 2012 Interim the Xstrata interim dividend in respect
Dividend" of the 2012 financial year of $0.14
per Xstrata Share
"Xstrata Executive Messrs. Davis, Reid and Zaldumbide
Director"
"Xstrata Financial Deutsche Bank AG, London Branch, Goldman
Advisers" Sachs International, J.P. Morgan Limited
and Nomura International plc
"Xstrata Group" Xstrata and its subsidiary undertakings
"Xstrata Shareholders" holders of Xstrata Shares
"Xstrata Shares" fully paid up ordinary shares of $0.50
each in the capital of Xstrata
"Xstrata Share Schemes" the Xstrata plc 2002 Long Term Incentive
Plan, the Xstrata plc 2002 Executive
Committee Annual Bonus Plan and the
Xstrata plc 2005 Added Value Incentive
Plan Xstrata, each as amended from
time to time
"Xstrata's Management" the members of senior management of
the Xstrata Group, being the Xstrata
Executive Directors and Peter Freyberg,
Benny Levene, Thras Moraitis, Ian
Pearce and Charlie Sartain
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "undertaking", "associated undertaking" have the
meanings given by the UK Companies Act.
References to an enactment include references to that enactment
as amended, replaced, consolidated or re-enacted by or under any
other enactment before or after the date of this announcement. All
references to time in this announcement are to London time unless
otherwise stated.
[1] Compared to 66.35 per cent. Xstrata ownership by
non-Glencore Group shareholders. These calculations do not include
the Glencore Shares to be issued pursuant to the Kazzinc
transaction announced on 25 September 2012.
[2] This statement should not be interpreted to mean that
earnings per share for Xstrata Shareholders will necessarily be
greater than those for the year ended 31 December 2011.
[3] Based on Glencore and Xstrata reported 2011 financial
results, the Combined Group's mining and metallurgical operations
would have contributed approximately 84 per cent. of 2011 EBIT.
[4] This statement should not be interpreted to mean that
earnings per share for Xstrata Shareholders will necessarily be
greater than those for the year ended 31 December 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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