The Swiss multinational mining and commodities trading company Glencore is looking for new acquisitions after its successful London float last month. If Glencore does manage to acquire the miner it is targeting the company would become one of the world’s largest mining operators, rivalling mining giants BHP Billiton and Rio Tinto in market capitalisation.
The Chief Executive of Glencore, Ivan Glasenberg is said to be interested in a $18.5 billion takeover bid for Eurasian Natural Resources Corporation PLC (ENRC) (LSE: ENRC, KASE: GB_ENRC), a FTSE-100 diversified natural resources company headquartered in London. Glasenberg has already spoken with Alexander Mashkevitch, Patokh Chodiev and Alijan Ibragimov, who are known to control about 45 per cent of ENRC's shares.
As per unnamed sources both the sides are equally keen on the takeover bid and they will be meeting again in a few weeks to decide just how to proceed. Mr Glasenberg has also spoken with the government of Kazakhstan who own 12% of the miner and is rumoured to have received a positive response from them.
With the majority of ENRC’s mining operations being based in Kazakhstan that is a major plus for Glencore. Mr Glasenberg has claimed that the 38 billion pound sterling listing for Glencore in the London stock exchange has given him enough firepower to make new acquisitions.
With ENRC currently being plagued with boardroom disputes and lowering stocks this would make a big difference to the company. It has already lost 30% on its shares this year and on Friday it closed at 742p. With two independent directors being sacked from ENRC last week the company is in a pretty bad shape and the merger with Glencore may be just the shot in the arm that it needs.