Xstrata confirms Vale talks, says full-year net profit rose 13.5%
Mining company Xstrata PLC confirmed Monday that it is in talks to be taken over by Brazil's Vale do Rio Doce SA as it announced a 13.5% rise in full-year net profit.
3 March 2008
ZUG - Mining company Xstrata PLC confirmed Monday that it is in talks to be taken over by Brazil's Vale do Rio Doce SA as it announced a 13.5% rise in full-year net profit.
The Anglo-Swiss company said the talks "with Vale are ongoing and may or may not lead to an offer for Xstrata."
Brazilian media have reported that Vale could pay as much as US$90 billion in cash and stock for Xstrata, though neither side has so far given any concrete figures.
Any deal would require approval from Glencore International AG, which owns over 34 percent of Xstrata's shares.
Xstrata said net profit last year reached US$5.54 billion up from US$4.89 billion in 2006. Analysts had forecast a slightly lower annual net profit.
The Zug-based company said growth was helped by rising commodity prices and extraction of key metals, and indicated that it would increase copper production in Peru.
Xstrata shares closed down 0.2% at CHF81.90 on the Zurich exchange Monday.[Copyright ap 2008]