Glencore boss to pick up £69m dividend

THE chief executive of commodities giant Glencore, Ivan Glasenberg, will pocket a dividend of £69 million following the group’s maiden pay-out to shareholders, it was revealed yesterday.

Glasenberg, who owns a 15.5 per cent stake in the company which is looking to merge with mining group Xstrata, will receive the bumper award after the company unveiled its first full-year dividend of 6.9p a share.

Revenues in 2011 hit £117 billion, a 28 per cent increase on 2010, mainly due to higher prices achieved in sales of crude oil, copper, wheat and gold. Net income was up 7 per cent to £2.56bn, although Glencore’s trading arm saw an 18 per cent drop in operating profit largely because of losses on cotton trading. Unveiling the results, Glasenberg brushed aside criticism of the proposed tie-up with Xstrata which would be the largest deal in the mining sector since Rio Tinto’s acquisition of Alcan in 2007.

A number of Xstrata shareholders, including Standard Life Investments which owns 2.2 per cent of the company, have said they will vote against the deal as they believe the terms do not recognise the company’s potential.

But interviewed yesterday, Glasenberg said: “This is a merger of equals. Xstrata have got most of the senior jobs.

“Most previous mergers of equals were done at a ratio of equals – this deal… has been done at a premium,” he added.

Glasenberg, the single largest Glencore shareholder, will become deputy chief executive under the merger proposals, reporting to fellow South African Mick Davis.

“Mick has certain strengths, I have certain strengths. It is a perfect combination.”

Glasenberg said its trading division provided a wealth of potential deals and growth for the combined group.

“We deal with 7,200 suppliers, we see opportunities before anyone else does,” he said. “The Xstrata shareholders are going to tap into this mass of information and knowledge.”

The world’s largest diversified commodities trader is offering 2.8 new shares per Xstrata share it does not already own. Analysts said Glencore’s comments were as expected given a shareholder vote is still months away. Swiss-headquartered Glencore, which floated on the London Stock Exchange last year, is one of the world’s largest commodities traders with big operations in wheat, iron ore, copper, zinc and oil.

Glasenberg became a paper billionaire with a stake worth £6bn when the firm listed. Shares in Glencore fell by 16.65p, or 4 per cent, to 403.35p.