Mining giant Xstrata has approached its rival Anglo-American about the possibility of a merger.
By Ian Armitage
Mick Davis, Xstrata’s Chief Executive said the proposed union was “compelling” as he is seeks talks about a merger of equals to better compete in a consolidating mining sector.
Anglo confirmed it had received an approach, but is likely to resist the tie up.
Its shares have jumped on the news.
Xstrata, the world's largest exporter of coal for power stations, has grown from a small Swiss producer of steel alloys in the late 1990s to the fifth-biggest mining group by market value through a string of acquisitions.
Rio Tinto and BHP Billiton have already agreed a similar joint venture, with Rio scrapping a planned tie-up with Chinalco, a state-controlled Chinese company.
The Xstrata/Anglo merger would enable the firms to compete with bigger competitors.