Let Glenstrata's trader not blinker its miner's vision
The London media are abuzz with the proposed merger between Glencore and Xstrata, the commodity broker and miner and the journos are full of whether it is a good idea to have traders and producers under one roof.
Either the media have forgotten what they once knew or they are being naive in the extreme – but probably they are both.
Glencore, formerly Marc Rich, floated in May last year on the LSE at 530p, a price which, other than for a few days after the IPO, it has not seen since. We should not forget that the only reason it was brought into the public market was so that it could be valued for the sole purpose of acquiring Xstrata, both of which live in PO Boxes a few kilometres from each other in the small Swiss towns Zug and Baar respectively which have an aggregate population of about 40,000, a quarter of that of the staff of combined companies.
Both are strong in their fields and there is no doubt there is plenty of synergy to be found in the joint unit. Fear of having producers and traders in the same group? How about the oil companies, the largest of which all have upstream and downstream businesses living happily together – to the outside at least – and which compete at all levels.
Sure, during and long after the oil crisis of 1973 there was much moaning about the excessive power of the “Seven Sisters”, the group comprising Anglo-Persian Oil Company (now BP), Gulf Oil, Standard Oil of California (Socal), Texaco (now Chevron), Royal Dutch Shell, Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil), in other words the large global operators, but in the meantime that industry has consolidated further and the world has not come to an end as a result.
The oil guys were as hated in the 70s as bankers were in the naughties and without a doubt the commodity traders will be in the coming decade. Anyhow, I see nothing scary in a £70bn combination of the two, still of lower market value that global economic powerhouse and unremitting contributor to growth and wealth creation, Facebook.
Sino Euro Royal Investment Group - News
Germany may be open to boosting the combined aid limit from 500 billion euros ($651 billion) when a permanent fund runs alongside the temporary fund starting in July, government officials in Berlin said. The need for a beefed-up fund was dramatized by
Fear of having producers and traders in the same group? How about the oil companies, the largest of which all have upstream and downstream businesses living happily together – to the outside at least – and which compete at all levels.
Sino-Forest's 6.25 percent notes due in October 2017 have risen to 34.75 cents on the dollar, from 28.625, after the company accused of fraud said Jan. 12 that bondholders agreed to waive a default triggered by delays in publishing third-quarter
For Paul Murphy, at The Financial Times, the recent scandal regarding Sino-Forest, a lumber company listed on the Toronto stock exchange, may hold some lessons for investors in outfits with assets in faraway regions. The firm´s story, with alleged
A Slovenian appeals court upheld a lower-court decision to dismiss a complaint by Sinfonika dd against national phone company Telekom Slovenije dd over its alleged dominant position. Sinfonika, which is in bankruptcy, was seeking 34 million euros ($43