Glencore plans to drop Xstrata name

Glencore Xstrata plans to drop the ‘Xstrata’ from its corporate name – in a move that will erase the final remnants of a company that had been one of the world’s five top miners before its acquisition by the Swiss-based commodities house.

The $76bn tie-up of Glencore Xstrata started as a merger of equals, but turned into a full and bloody takeover last year – leading to the departure of the miner’s chairman and most of its senior directors including chief executive Mick Davis. Nevertheless, Glencore preserved its own name and that of Xstrata.

However, the commodities group has decided to drop Xstrata from its name next year, according to people familiar with the situation.

The decision, which requires a shareholder vote, will signal the end of a company that, through a series of audacious takeovers, grew into one of the world’s top miners in little more than a decade.

Xstrata was founded in 1999 and floated in London three years later, after it acquired the Australian and South African coal assets of Glencore. This was the prelude to an aggressive acquisition spree, in which it added Australian copper and zinc miner MIM Holdings in 2003 and Canadian producer Falconbridge in 2006 – a deal that propelled the company into the FTSE 100 index.

Name changes have a long tradition in the natural resources industry. French oil company Total of France was known as TotalFinaElf between 2000 and 2003 following its merger with two other oil companies. Chevron traded under the ChevronTexaco brand between 2000 and 2005. Similarly, BP was briefly known as BP Amoco after its merger with the US oil company.

But several other groups in the commodities sector have kept the names of their original founders, including BHP Billiton, formed after the merger of an Australian and South Africa mining groups, and oil company ExxonMobil.

Since the Xstrata deal was completed in May, Glencore, which is led by Ivan Glasenberg, has set about dismantling Xstrata’s corporate structure. It has slashed costs by $1.4bn, closed 33 Xstrata offices and mothballed more than half of the development projects it inherited.

It has also dropped ‘Xstrata’ from much of its corporate literature – including investor presentations given by its operating divisions. But a formal adoption of the single name Glencore will require shareholder approval at the annual general meeting, which is not due to take place until May.

Since his departure from Xstrata, Mr Davis has set up a new mining venture called X2 Resources, provisionally raising $1bn for the vehicle from investors.