Glencore International is considering a merger with miner Xstrata to create a mining and trading group worth £55bn.
A two-stage proposal is being worked out where Glencore could merge with Xstrata in a reverse takeover and then reduce its stake in the enlarged group to below 40%, according to the UK’s Telegraph newspaper.
Glencore already holds 34.4% of Xstrata and after the proposed merger it could retain control of the combined company, the newspaper said.
Goldman Sachs and JP Morgan are advising Xstrata on the merger while Morgan Stanley and Citigroup have been putting together Glencore’s proposal.
Swiss-based Glencore is valued at about £21.9bn under the terms of a bond issued last December, while mining giant Xstrata is valued at £33.4bn.