Xstrata gets EC nod

The European Commission has approved Xstrata‘s (XSRAF-O, XTA-L) proposed acquisition of Falconbridge (FAL-T, FAL-N).

“After examining the operation, the commission concluded that the transaction would not significantly impede effective competition in the European economic area or any substantial part of it,” the commission said in a prepared statement.

The regulator concluded that the proposed union would result in limited overlap in the mining, processing and sales activities of Falconbridge, Xstrata and major Xstarta shareholder Glencore International. Glencore owns a 14.3% stake in Xstrata.

The approval comes as the clock ticks down on Inco‘s (N-T, N-N) competing bid for Falconbridge. Inco’s offer of $17.50 in cash plus 0.55676 of a share is set to expire today at 8:00 p.m. (Toronto time). The EC cleared Inco’s bid on July 4.

Xstrata’s recently sweetened $59-per-share bid still requires approval by Investment Canada. Such approval might take until early August after the regulatory body recently decided it need more time to fully consider the implications of Xstrata’s hostile bid.

Xstrata’s bid expires on July 21; the Swiss-based miner says it is confident that it will receive the necessary clearance under the Investment Canada Act.

Shares in Falconbridge were off 29 at $60.46 in morning trading in Toronto following the news; Inco was $1.49 cheaper at $74.87. In London, Xstrata was down 43 pennies to 2,089 pence.