While approving the merger, Xstrata shareholders rejected a controversial $223-million retention pay package designed to keep about 70 top Xstrata managers with the merged company. Xstrata Chairman Sir John Bond strongly supported the retention package, and when it failed, he said he would step down from his position as chair-man of Glencore Xstrata plc once the com-pany’s board has completed a search for a new independent chairman.

Xstrata Chief Executive Mick Davis will become CEO of Glencore Xstrata for a period of six months, after which Glencore CEO Ivan Glasenberg will take that position.

The final merger transaction is based on Xstrata shareholders receiving 3.05 Glencore shares for each Xstrata share. The original proposed ratio was 2.8 to one and had been a sticking point for Xstrata share-holders, who felt it undervalued their shares.

On November 22, two days after the shareholder approvals, the European Commission announced it cleared the acquisition of Xstrata by Glencore, condi-tional on the termination of Glencore’s off-take arrangements for zinc metal in the European Economic Area (EEA) with Nyrstar and the divestiture of Glencore’s minority shareholding in Nyrstar. The Commission had concerns that the merged entity would have the ability and incentive to raise prices for zinc metal.

“To remove these concerns, Glen-core committed (a) to terminate its exclusive long-term off-take agreement with Nyrstar, the largest European zinc metal producer, in so far as the agreement relates to commod-ity zinc products produced by Nyrstar in the EEA, (b) not to buy directly or indirectly any EEA zinc metal quantities from Nyrstar for a period of 10 years, (c) not to engage, for 10 years, in any other practices that have the effect of materially restricting Nyrstar’s abil-ity or incentive to compete effectively with Glencore in zinc metal in the EEA, and (d) to divest Glencore’s minority shareholding in Nyrstar of around 7.79%,” the European Commission statement said.

The Commission concluded that the transaction, as modified by Glencore’s commitments, would not raise competition concerns and noted its decision was condi-tional upon the full implementation of Glencore’s commitments.