Statement by Antoine Colombani, Spokesperson of Joaquín Almunia, on the approval by the EC of Glencore's acquisition of Xstrata, subject to conditions
Type: Complete press conference
Brussels - EC/Berlaymont
On 22 November 2012, Antoine Colombani, Spokesperson of Joaquín Almunia, Vice-President of the EC in charge of Competition, made a statement on the approval by the European Commission of Glencore's acquisition of Xstrata, subject to conditions.
The EC has cleared, under the EU Merger Regulation, the proposed acquisition of Xstrata, the world's fifth largest metals and mining group, by Glencore, the world's leading metals and thermal coal trader. The clearance is conditional on the termination of Glencore's off-take arrangements for zinc metal in the European Economic Area (EEA) with Nyrstar, the world's largest zinc metal producer, and the divestiture of Glencore's minority shareholding in Nyrstar. The EC had concerns that the merged entity would have the ability and incentive to raise prices for zinc metal, an important input for many EU industries. The commitments address these concerns.
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||Soundbite by Antoine Colombani, Spokesperson of Joaquín Almunia, Vice-President of the EC in charge of Competition, (in ENGLISH) saying that the European Commission has cleared, under the EU merger regulation, the proposed acquisition of Xstrata, the world's fifth largest metals and mining group, by Glencore, the world's leading metals and thermal coal trader; this merger brings together two major global players in key commodities; after this deal was notified to the Commission, they carried out an investigation that showed this transaction in its initial form would raise concerns for competition in the supply for zinc metal in Europe; the transaction risked to significantly strengthen Glencore's already strong position in the EU and reinforce its ability and incentive to raise zinc prices; this is why the Commission's approval is granted only on the strict condition that Glencore severs its ties in Europe with Nyrstar, which is the world's largest zinc metal producer; Glencore has agreed both to divest its minority shareholding in Nyrstar and to terminate its off-take arrangements for zinc in Europe with this company; these conditions remove the Commission's concerns as they ensure that competition in the European zinc metal market is preserved; zinc is a key input to many EU industries; preserving competition in this market therefore means that European customers such as steel galvanisers and car makers can continue to produce valuable consumer goods at low price and good quality.