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King & Wood Mallesons (KWM) has acted on a significant deal in the mining sector, advising on Xstrata’s all-share merger with Glencore International plc.
Firms: King & Wood Mallesons (Glencore and Xstrata ), Freshfields (international counsel for Xstrata) and Linklaters (international counsel for Glencore).
Area: Mergers and acquisitions
Value: The merger values the Xstrata shares at US$61.9 billion, for which 2.8 Glencore shares were offered for each Xstrata share.
Key players: The KWM team was led by M&A partner Nicholas Pappas (pictured), who continued his longstanding relationship with Xstrata and Glencore. Pappas was assisted by partner Wayne Leach, who advised on anti-trust issues, and partner Andrew Gray, who advised on employment issues. Special counsel Malcolm Brennan advised on the Foreign Investments Review Board (FIRB)-related aspects and partner Frank Brody provided stamp duty advice.
Deal significance: Upon completion, the merger will be the largest of its kind in the mining industry to date and the largest M&A deal, in money terms, worldwide this year.
Glencore will offer 2.8 new shares to each shareholder in Xstrata, representing a 15.2 per cent premium to Xstrata shareholders The new entity, to be called Glencore Xstrata, will be one of the world’s largest diversified mining houses and have a combined market capitalisation of US$90 billion spanning mining, agriculture and trading. The transaction involved negotiations with deal teams across the world to secure approval from a number of regulatory bodies including, in Australia, the FIRB and the Australian Competition and Consumer Commission.
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