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Glencore wants Pacorini merger to boost warehousing

Published 03/03/2011, 02:02 PM
Updated 03/03/2011, 02:04 PM
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* Glencore seeks to increase presence in warehousing

* Wants to combine Pacorini with an outside partner

* Glencore bought Pacorini for $209 million last September

LONDON, March 3 (Reuters) - Glencore wants to boost its presence in metals warehousing by combining its recently-acquired Pacorini unit with an outside partner, it said on Thursday.

The plans by Glencore, the world's biggest commodity trader, appeared in its full annual report distributed to its bondholders and also obtained by Reuters.

The company reported a 40 percent jump in 2010 profit and promised a robust 2011, strengthening its hand for a possible stock market listing that could value it at about $60 billion.

Glencore completed its purchase of the metals warehousing division of Pacorini, the Italian family owned company, in September.

In Thursday's report, the Swiss-based group said it had paid $209 million in cash for the business and then started investigating how grow further in that area.

Glencore said it had begun "a review of the strategic alternatives to strengthen Glencore's participation in the metals warehousing business, which is expected to result in a merger involving the acquired business and a third party."

It gave no further details of the merger plans. Following the takeover, Pacorini contributed revenue of $64 million to Glencore and income before attribution of $5 million. On a proforma basis, its full-year revenue was $220 million and income was $31 million, the report said.

Takeover activity was strong in the metals warehousing sector last year. Independent commodities trader Trafigura acquired London Metal Exchange (LME)-approved warehousing company NEMS Ltd in March last year.

Trafigura's takeover followed that of Goldman Sachs for U.S.-based warehouse and logistics company Metro International trade services in February 2010. (Reporting by Eric Onstad and Quentin Webb, editing by Anthony Barker)

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