Mining firms have been hit by falling demand for metals
Swiss-based miner Xstrata has announced that it has "no intention" of making an offer for rival Anglo-American.
In June, Xstrata approached its rival with a view to a merger, but Anglo-American rejected the proposal.
At the beginning of this month, the miner was ordered to make an official offer for Anglo by 20 October by the UK's Takeover Panel.
Xstrata's chief executive said the company would "assess a range of alternative growth options" instead.
Cost savings
"It is regrettable that [Anglo] immediately rejected our approach, without engaging with Xstrata to investigate the potential to create more value than either company could do alone," said Mick Davis, boss of the Swiss miner.
But he reaffirmed his belief that a merger would be beneficial for both parties.
"The compelling strategic rationale for a merger remains undiminished."
He said a merger would result in savings of $1bn (£622m) a year after three years.
"Cost savings measures by either company alone simply cannot realise this value, nor deliver the associated strategic benefits," he added.
Falling demand
Xstrata had originally claimed a union "of equals" between the two companies was "highly compelling".
However, Anglo dismissed its rival's approach as "totally unacceptable" and "lacking strategic merit".
Mining firms have been hit by falling demand for metals amid the downturn.
They have also had problems raising cash because of the credit crunch, which last year led Xstrata to abandon its £5bn bid for its rival Lonmin.
Earlier this year, Rio Tinto and BHP Billiton agreed a joint venture - a deal struck after Rio scrapped a planned tie-up with Chinalco, a state-controlled Chinese company.
Mining firms have been hit by falling demand for metals |
Swiss-based miner Xstrata has announced that it has "no intention" of making an offer for rival Anglo-American.
In June, Xstrata approached its rival with a view to a merger, but Anglo-American rejected the proposal.
At the beginning of this month, the miner was ordered to make an official offer for Anglo by 20 October by the UK's Takeover Panel.
Xstrata's chief executive said the company would "assess a range of alternative growth options" instead.
Cost savings
"It is regrettable that [Anglo] immediately rejected our approach, without engaging with Xstrata to investigate the potential to create more value than either company could do alone," said Mick Davis, boss of the Swiss miner.
But he reaffirmed his belief that a merger would be beneficial for both parties.
"The compelling strategic rationale for a merger remains undiminished."
He said a merger would result in savings of $1bn (£622m) a year after three years.
"Cost savings measures by either company alone simply cannot realise this value, nor deliver the associated strategic benefits," he added.
Falling demand
Xstrata had originally claimed a union "of equals" between the two companies was "highly compelling".
However, Anglo dismissed its rival's approach as "totally unacceptable" and "lacking strategic merit".
Mining firms have been hit by falling demand for metals amid the downturn.
They have also had problems raising cash because of the credit crunch, which last year led Xstrata to abandon its £5bn bid for its rival Lonmin.
Earlier this year, Rio Tinto and BHP Billiton agreed a joint venture - a deal struck after Rio scrapped a planned tie-up with Chinalco, a state-controlled Chinese company.
No comments:
Post a Comment