Commodity producer/trader boundary starts to blur

October 14, 2014

Glencore’s interest in a deal with Rio Tinto was about more than corporate ambition. Commodity traders are keen to buy hard assets to secure supply, while producers view logistics and marketing as a way of boosting returns. Expect more convergence, and shrinking trading margins.

Glencore Rio takeover would be harder than Xstrata

October 7, 2014

Ivan Glasenberg’s miner-trader is stalking $90 billion iron giant Rio Tinto. Though there’s some logic to a deal, Glencore will be loath to pay much of a premium, and the clash of cultures would be extreme. Rio is also in a better position to resist than rival Xstrata in 2012.

Rio Tinto can dig in against Glencore

October 7, 2014

The miner’s shares leapt after it admitted rebuffing the commodity trading giant. Yet the timing is opportunistic, as iron ore slumps, and a $160 bln merger looks suspiciously like a takeover on the cheap. So Rio’s board can justifiably demand a big premium, or no deal.

Blythe Masters could chair Glencore

April 3, 2014

The derivatives mastermind is leaving JPMorgan’s commodities unit after its sale to Mercuria. Her next stop could be Glencore. The trading house’s all-male board looks anachronistic. It needs a chair to keep Ivan Glasenberg in check. And her banking nous would be useful.

Big miners adjust, slowly, to austere times

August 20, 2013

Glencore and BHP Billiton are on opposite sides of the mining spectrum. But both the trader and the low-cost producer are girding for a long, slow period with goodwill writedowns and leaner investments. The strategy is right, but shareholders will have to wait for rewards.

Angry aluminium users should sue the Fed as well

August 9, 2013

Lawsuits against JPMorgan, Glencore and Goldman allege they all artificially pumped up aluminium prices by keeping metal off the market. The ire is understandable, but some of it should be directed at central bankers. Their low rates make hoarding profitable. 

Glencore should just name Ivan Glasenberg chairman

May 16, 2013

The miner’s shareholders have handed Chairman John Bond his walking papers. Best practice dictates his permanent replacement be a strong outsider. This precludes tapping Glasenberg, the miner’s CEO and biggest shareholder. But a dual mandate would better reflect corporate reality.

Glencore Xstrata needs governance champ in chair

January 24, 2013

The commodity trader’s board is already stuffed with operational expertise. CEO Ivan Glasenberg should resist the temptation to go for more of the same. The board needs a chairman with impeccable governance credentials. One former UK government minister fits the bill.

Key ingredient missing for M&A revival

September 17, 2012

Glencore-Xstrata and BAE-EADS might set bankers’ hearts racing. Bulls have financial fuel: QE3 makes debt cheap. They have economic logic: revenue pressure from sluggish growth makes scale more valuable. But a wave of mergers won’t come until confidence rises too.

Xstrata should accept revised Glencore pitch

September 10, 2012

The merger is now a $35.5 bln takeover at a modest premium. The tie-up is riskier since Xstrata CEO Mick Davis would exit after six months, although Chairman John Bond would stay. Xstrata investors will want more. But it’s hard to see a realistic alternative offering better value.