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Qatar builds $2.65-billion Xstrata stake ahead of Glencore deal

A logo of the Swiss mining company Xstrata is pictured at its headquaters in Zug, February 6, 2012. REUTERS

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DUBAI - Qatar's sovereign wealth fund has built a 5-percent stake in Xstrata ahead of the mining giant's planned $41 billion takeover by commodities trader Glencore.

 

The tiny Gulf Arab state's sovereign wealth fund, Qatar Investment Authority (QIA), now ranks as the third-largest shareholder in Xstrata behind Glencore and asset manager BlackRock Inc., according to Reuters data.

Regulatory filings showed that Qatar, which owns stakes in Credit Suisse and supermarket chain Harrods, built up its Xstrata holding -- worth $2.65 billion at current prices -- through a series of stock market transactions which began soon after Glencore announced it was buying the company.

No immediate comment was available from the Qatar fund.

Potential support for Glencore from Qatar could be key in seeing through the Xstrata acquisition, which has run into opposition from key shareholders including Standard Life Investments and Schroders.

Glencore plans to buy Xstrata, the world's no.4 miner, in an all-share transaction that could create a combined group worth more than 50 billion pounds ($79 billion), shaking up the industry with its biggest deal to date.

Glencore, the world's largest diversified commodities trader, already owns 34 percent of Xstrata and a tie-up between the two -- a deal which would trump Rio Tinto's $38 billion acquisition of Alcan in 2007 -- has long been expected, as Glencore aims to add more mines to its trading clout.

The merger needs to be approved by 75 percent of shareholders excluding Glencore, which is barred from voting.

Qatar's sovereign wealth fund, estimated to have assets of around $100 billion, is widely seen as the most aggressive in the world, ploughing the tiny Gulf state's gas dollars into a range of Western assets including automakers, prime real estate and global banks.

In recent weeks, the tiny Gulf state's sovereign fund has also picked up minority stakes in France's Total, conglomerate Lagardere and luxury house LVMH.