Awash with cash after offloading its Las Bambas copper mine in Chile for around £3.5bn, Glencore Xstrata (GLEN) is to buy Chad-focused oil company Caracal Energy (CRCL) for $1.3bn (£778m). The deal will also involve Caracal abandoning a merger with Canada's TransGlobe Energy.
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As part of the all-cash 550p a share offer - which is backed by Caracal's board - the Swiss commodities trader will pay TransGlobe a fee of $9.25m to cover termination costs under the previous proposed merger deal. It is expected that Caracal's shareholders will vote on the offer in early June, with closing expected to occur soon afterwards - subject to appropriate regulatory approvals.
