London - The mining group Xstrata and commodities trader Glencore are negotiating the transaction all share, which would create a combined group worth more than 50 billion pounds (79 billion U.S. dollars).
Trader largest diversified commodities in the world already owns 34 percent stake in Xstrata and bonds between the two Swiss business - potentially a big seizure to date in the industry - has long been expected as Glencore is designed to add more minutes to their trading CLOUT.
Speculation has accelerated after Glencore in bumper $ 10 billion listing in May, which gave the trader and his ambitious executive Ivan Glasenberg currency transactions. The list also allows the market to establish the value of Glencore - a key requirement of Xstrata shareholders and its management.
Glencore - a trader of metals, minerals and oil, which is also currently, has assets of mines to agricultural land - said at the time of going to the motives of the public after nearly four decades as a private company was to take advantage of acquisition. However, to date he has been restrained, foreclosures in minority Australian nickel producer Minara on and search for control of South African coal miner Optimum.
"It is expected that these two companies together and it's obviously a little faster than we expected, but it makes sense, considering how the company operates and the current market position, says an analyst at Collins Stewart, Tim Dudley.
Glencore shares fell nearly 17% since its inclusion, but it is still effective drop Xstrata.
News that Xstrata, the world's fourth-largest diversified group, has received a specific approach and in the discussions, the growth of both companies' shares, sending Xstrata to 13 percent and Glencore more than 5 percent in early London trading.
Glencore in Hong Kong traded shares gained 6 percent to trade was suspended.
"It confirms why Glencore became public. They are the capital to buy other companies, "said Ion-Marc Valahu, a fund manager at Geneva firm ClairInvest.
Both sides said there is no assurance that the proposal will be made and the deal was described as a proportion of all the "union of equal," which would mean a friendly transaction with no premium.
Both sides have very little overlap on the side of the mountain, means the combined entity, "Glen layers" will get a synergistic effect on certain areas of marketing, but otherwise will combine industry and operational assets, which will create a huge presence in copper and coal, among other products.
Merger of equals
Any deal would also have to be friendly, and means Glasenberg Executive Mick Davis Xstrata would have to agree on one thing that has so far kept the two friends - the valuation.
Davis and his Chairman John Bond, is expected to accept any agreement that does not contain any material up to the shareholders.
Glencore, although a shareholder cannot vote on the deal, leaving the decision with the agencies.
"(M) Makes a lot of sense. I think he should come, then," said Charles Stanley analyst Tom Gidle-Kitchin.
"It will be interesting to see whether the individual has a role in it - I think that would be resistant to the merger, which does not include a decent premium to Xstrata Mick Davis, but it will be interesting to see."
Xstrata himself made a "merger of equals" request for Anglo-American in 2009, but not after Davis has steadfastly refused to offer a premium.
Glasenberg Glencore has publicly stated that he sees value in a deal with Xstrata, while Davis said the prospect of both analysts as self-listed companies was "unsustainable."
If Glencore to buy all outstanding shares of Xstrata at current market prices, which will cost about 21 billion pounds, making it the largest deal in the sector with the acquisition of Rio Tinto's aluminum producer Alcan in 2007.
($ 1 = 0.6306 pound)
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