The paper "Mergers and Acquisitions: Glencore and Xstrata Company " is an outstanding example of finance and accounting coursework. A merger is a process whereby two firms that have relatively equal bases are combined through consolidation or absorption. On the other hand, the acquisition is the process whereby one firm buys another firm wholly. The acquisition is also referred to as take-over. Whenever two companies combine and form an entirely new company; this is referred to as consolidation. The acquisition can further be classified as public or private depending on whether the firms are listed in the stock market or not.
Depending on the arrangement of the acquiree or target company, the acquisition can be friendly or hostile. The two words are used interchangeably irrespective of the fact that the two words may have slightly different meaning (Harwood 2006, p. 347-356). Mergers and acquisitions have been taking place since time immemorial. In fact, since the year 2000, the value of mergers and acquisitions has been estimated at about $ 309.6 billion. This is actually a 69 % increase from the earlier decade (Harwood 2006, p. 347-356). Introduction This paper’ s focus is on mergers and acquisition of two companies namely Glencore International Plc and Xstrata Plc.
In order to understand the concept of mergers and acquisition, this paper will analyze both the companies in terms of financial activities and non-financial activities in order to come up with a comprehensive report. Background of the two companies Glencore International Plc was founded by Marc Rich in 1974 and its main focus, then, was on the production of both ferrous and non-ferrous metals. Glencore International Plc is one of the leading producer and marketer of consumer products in the world today which is headquartered in Baar. Glencore International Plc later shifted focus on crude oil.
On acquisition of Dutch Grain Company, it expanded its activities on agricultural products in the course of the 1980s. Thus, it deals with various activities which include processing, refining, production and transporting metal, mineral resources and agricultural products in all parts across the globe.
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