New York, February 2 (FinanceEnquiry.com) - Glencore and Xstrata have reached the final stages of discussions for merging together in a nearly $80 billion deal that will have a tremendous impact on the mining industry as the world’s largest commodities trading houses combines with one of the largest miners of thermal coal and copper. The deal is likely to be announced ahead of Xstrata’s annual results on Tuesday. Last May, Glencore’s valuation was done on the basis of its $10 billion flotation, which led to current merger talks.

Last year, just before the IPO, Glencore had said that a merger with Xstrata, in which it has a 34 percent stake, made strategic sense. The company also said that it would be advantageous for both the parties if Xstrata’s commodities production flows into its trading system. In the past, commodities bankers had said that synergies worth $700 million would be delivered by the merger of the two companies. However, some investors are not satisfied regarding the savings that might be achieved because the two companies have different strategies. At close on Wednesday, Glencore was valued at $45 billion and Xstrata was valued at $50 billion. The combined company, excluding the stake that Glencore already has, would be worth more than $80 billion.