Glencore Case Study - 1524 Words

Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry in 2012 Diana Alvarez Valencia (1310200) University Canada West Dr. Paul Rome MGMT 661 Strategic Management Tuesday, May 12, 2015 Introduction and Problem Identification In this case study we will identify the problems that can be issued in the process of the merger between two of the largest commodities traders in the world, Glencore and Xstrata. It will provide the background of both companies, the situation analysis, identification of alternatives Companies Background. Glencore had been a trading company since their early years with the name of Marc Rich Co. Glencore, was founded by March Rich; Rich was a consummate dealmaker, doing business†¦show more content†¦In a global environment commodity industry, Glencore and Xstrata tried to find the best strategy to become more competitive and create a big successful billion company. For that reason, the merge between these two big companies was created. However, there are different problems that can be faced at the moment of the mergers; in the case of Glencore and Xstrata merge, the problem that I this paper will focus is the integration difficulties between these two companies – disparate corporate cultures including unethical practices-. Some of the integration challenges might include: Melding two disparate corporate cultures, Linking different financial and control systems, Building effective working relationships (different managers styles), Resolving problems regarding the status of the newly acquired firm’s executives, Loss of key personnel weakens the acquired firm’s capabilities and reduces its value. (Hitt, Ireland Hoskisson, 2013). Situation Analysis. The global mining industry becomes more consolidated increasingly and the major players in the industry were choosing as a growth strategy the mergers with different mining companies that can leverage their competitive advantages upon their competitors. The main competitors in the cooper production were : Codelco, BHP Billion, Freeport- McMoRan, Xstrata and Rio Tinto. (Hitt, Ireland Hoskisson, 2013).Show MoreRelatedGlencore, Xstrata and the Restructuring of the Global Copper Mining Industry1524 Words   |  7 Pagesï » ¿ Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry in 2012 Diana Alvarez Valencia (1310200) University Canada West Dr. Paul Rome MGMT 661 Strategic Management Tuesday, May 12, 2015 Introduction and Problem Identification In this case study we will identify the problems that can be issued in the process of the merger between two of the largest commodities traders in the world, Glencore and Xstrata. It will provide the background of both companies, the situationRead MoreInternational Trade Has Dramatically Increased Globalization Of The World Economy2649 Words   |  11 Pagesthese affiliate considering their assets. In some instances like that of the Ghanaian affiliate, the loans were seven times the equity capital. In another report, ActionAid accused Glencore of dodging taxes of up to US$76 million in Zambia from its copper mining activities (ActionAid, 2012). The report accuses Glencore of selling copper mined from its Mopani mines in Zambia to its Swiss affiliate at prices below the market prices and thus reducing its taxable profits in Zambia. In Kenya, Jorgen LevinRead MoreRelationship Between Board Size And Firm Performance2172 Words   |  9 PagesResults The results found in this study suggest that some of the relationships found during the literature review can be confirmed. For example, the literature states that smaller boards of directors reduce the coordination problems that lead to improved firm performance relative to larger boards of directors (Kini et al, 1995; Yermack, 1996; Eisenberg et al, 1998). This study found significant empirical evidence with the sample of FTSE 100 companies that this is the case which supports these findingsRead MoreMerger and Acquisition: Current Issues115629 Words   |  463 Pagesprice too far? The acquisition of Howard Smith Ltd by Wesfarmers Ltd 3.4 Financial analysis 27 27 31 33 35 vii viii CONTENTS 3.5 3.6 Assessment of the transaction Conclusion 38 40 4 An Essay on the History of a Merger: The Case of the National Bank of Canada Raymond Thà ©oret and Franà §ois-Éric Racicot 4.1 4.2 4.3 4.4 4.5 Introduction The structures of the two merged banks The new merged bank A low P/E ratio for the stock of national bank Conclusion 42 42 43 50 53 54