Norway has joined forces with Qatar in opposition to the $70 billion merger between commodities trader Glencore and miner Xstrata, further threatening one of the biggest deals in the natural resources industry over the past decade.
Norges Bank Investment Management, the manager behind Norway’s oil-backed sovereign wealth fund, has spent more than $500 million over the last few weeks buying Xstrata shares, according to regulatory fillings.
The move replicates the same strategy followed by fellow sovereign wealth fund Qatar Holding of boosting its stake in the miner to make its voice against the deal stronger.
NBIM is now the fourth largest shareholder in Xstrata – behind only Glencore , Qatar and BlackRock – with 87.8 million shares, equal to roughly 2.97 percent of the total and up from 1.72 percent in June.
The Norwegian buying spree came after NBIM privately indicated to both Xstrata and Glencore that it opposed the current terms of their planned merger. NBIM, Qatar Holding, Glencore and Xstrata all declined to comment.
Glencore is offering 2.8 of its shares for each of Xstrata’s but Qatar said in June that a ratio of 3.25 “would provide a more appropriate distribution of benefits of the merger”. The sizeable gap suggests the “Glenstrata” merger will collapse.
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