Links odds-on to get Glenstrata work

Glencore dominance in super-miner sees Linklaters take pole advice position


Glencore and Xstrata’s $64bn (£41bn) merger completed on 2 May, more than a year after tie-up talks first emerged. But the deal has changed significantly since early 2012 when the duo confirmed they were in discussions. Those changes could have implications for the main legal advisers, namely Freshfields Bruckhaus Deringer and Linklaters.

While first described as a merger of equals, the transaction is now widely referred to as a takeover by Glencore. A proposed structure from May 2012 showed Xstrata chief Mike Davis as CEO of Glencore Xstrata and Xstrata’s Trevor Reid as chief financial officer. Both had deputies hailing from Glencore. Most departments had two bosses: one from each legacy company.

The legal group was likely to follow this pattern. Xstrata chief legal counsel Benny Levene, who had been offered a bonus to stay, was expected to share top spot with Glencore GC Richard Marshall.

This has all changed, with the £140m of retention awards for Xstrata management voted down, Davis resigning, Glencore CEO Ivan Glasenberg taking the reins at the merged group and Levene leaving alongside Reid and others.

This has implications for the advisers. Marshall, formerly of Cadwalader Wickersham & Taft in London, has been confirmed as legal chief in a Glencore-dominated top team. Glencore’s legacy relationships are, of course, with Linklaters, especially Charlie Jacobs, who led on its 2011 IPO and the merger, and fellow City partner Owen Clay. It has also used Clifford Chance and Slaughter and May in the past, while Mourant Ozannes advised on offshore matters related to the merger.

Glencore Xstrata has no pretensions: it has no fixed panel and even Marshall has no official title now, only taking on the GC tag for the flotation.

The group is understood to be keeping its options open, but the Glencore influence means it could be the end of the line for Freshfields’ relationship with Xstrata, a major mining client going back at least to its 2002 IPO.

Linklaters is embedded in the Glenstrata fabric and is odds-on to advise on future deals.