Anglo American PLC (LSE: AAL) has rejected Xstrata PLC's (LSE: XTA) proposal of a merger of equals, saying it was "unattractive" for shareholders and that terms were "totally unacceptable".
"The board has concluded that the strategic case for the combination is unattractive for Anglo American shareholders. Irrespective of this lack of strategic merit, the terms proposed by Xstrata were totally unacceptable," Anglo said in a statement. "In the light of the review the board of Anglo American has unanimously concluded that the proposed combination with Xstrata would not be in the interest of Anglo American shareholders."
The company said the tie-up would weaken its strategic position by diluting its strong role in high-performing platinum, iron ore and diamond markets with exposure to nickel and zinc.
The online edition of the UK’s Independent newspaper cited an Xstrata spokesman as saying: "We are disappointed by Anglo American's rapid rejection. We are also surprised that the Anglo American board has not seen fit to engage with Xstrata to discuss our proposal in view of the substantial value for both companies' shareholders that would arise uniquely from a merger of the two companies."http://www.proactiveinvestors.co.uk
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