According to Bloomberg, the company exercised an option to buy back Prodeco for $2.25 billion plus profits accrued by the unit and cash Xstrata invested. Glencore last year sold the unit for $2 billion to fund its participation in Xstrata’s $6.1 billion rights offer. Coal prices have risen since then. Glencore’s decision to buy Prodeco reflects its view that the fair value of these coal assets comfortably exceeds the repurchase price.
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