On June, 24, Switzerland-based mining group Xstrata plc (Xstrata) released a statement revealing the details of its merger proposal made to rival UK-based mining company Anglo American Plc.
In the company statement which explains the advantageous aspects and conditions of the proposed merger, Xstrata's letter addressed to Anglo American's board on June 17 is also included.
According to the details of the proposal, Xstrata projected a group with a board and a management team sourced from both companies, complementary and of equal sizes, to control the combined operations of both companies and to have the ownership of the parties' assets.
In the letter "strictly private and confidential" written by the chief executive of Xstrata to the chairman and chief executive of Anglo American dated June 17, 2009, Xstrata's M. L. Davis said, "In future, only the largest and most diverse global mining groups will generate superior returns for their shareholders by gaining access to capital, the most attractive resources and the best talent, while better managing the increasing complexity and risk associated with our industry. A combined Anglo American/Xstrata will be well placed to compete with major industry peers such as BHP Billiton, Rio Tinto and Vale for these key ingredients for success."
As SteelOrbis previously reported, on June 23 the board of Anglo American announced its swift refusal of the merger proposal of Xstrata, saying that the combination is "unattractive" and not in the interests of its shareholders, and that the terms proposed by Xstrata were "totally unacceptable."