Glencore merger rumours increase

A source said Glencore was considering a merger with Xstrata to create a group worth 55bn. It was reported Glencore had hired advisers to work on a potential deal.

Rumours have swirled for months that the privately owned Swiss company was considering going public either via an initial public offering or a merger.

"It is hard to know how much truth there is in the reports," said Neil Beddall, a credit analyst at Barclays Capital. "Ultimately, we believe Glencore will become a listed entity at some stage, whether by merger-takeover or by IPO is hard to tell."

The increased disclosure required by a listing could reduce borrowing costs for the secretive Swiss trading firm, whose CDS levels soared during the financial crisis.

"From a credit perspective we would expect any deal to be designed to be credit neutral, and while Glencore has more to gain, in the longer term it could be beneficial to both parties," Royal Bank of Scotland analysts wrote in a note.