Glencore’s Acquisition of Xstrata

In November 2012 the European Commission approved the acquisition by Glencore of Xstrata, subject to conditions. The transaction combines the world’s leading metals and thermal coal trader with the world’s fifth largest metals and mining group. 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 Compass Lexecon team assisting the parties and their respective legal advisers, Linklaters LLP (for Glencore) and Freshfields Bruckhaus Deringer LLP (for Xstrata), consisted of Jorge Padilla, Peter Davis, Enrique Andreu, Urs Haegler, David Shaharudin, Bertram Neurohr, and Manuel Mertel Morillo. The European Commission granted approval at the end of its ‘Phase-I’ investigation. However, this was preceded by a lengthy pre-notification period, during which Compass Lexecon submitted several papers. Those contributions included an analysis of the geographic delineation of the market for zinc metal and an assessment – based on the use of critical loss analysis and the Generalised Upward Pricing Pressure Index (GUPPI) – of the price impact of the concentration in a putative EEA-wide market for zinc metal. Compass Lexecon worked with Christian Ahlborn and his team at Linklaters LLP, as well as with Rafique Bachour and his team at Freshfields Bruckhaus Deringer LLP.