By Garry White Published: 7:51PM BST 22 Jun 2009  It argued the proposal from the Swiss-based group was “unattractive” to its shareholders and would “profoundly impact” its exposure to attractive markets while increasing exposure to less attractive ones.  Several Anglo shareholders also criticised the plan, calling on Xstrata to pay a premium if it wanted control of the company.  Cynthia Carroll, Anglo’s chief executive told The Daily Telegraph: “We have a unique portfolio and we’re well positioned on the cost curve.”  The Anglo board unanimously rejected the Xstrata merger proposals. A company statement said: “A combination with Xstrata would profoundly impact the nature of the group’s portfolio by significantly diluting Anglo American’s unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc.”  Xstrata’s proposals in their current form face other serious obstacles. One shareholder, Old Mutual Investment Management, said: “This would not be a merger of equals. Anglo American has fantastic assets and we think it has one of the best future growth profiles in the diversified mining sector. Cost synergies [from the proposed merger] have been estimated at up to $1bn, but the company has a cost saving programme that will cut $2bn from costs.”  The South African government has expressed its concern about possible job losses. Sandile Nogxina, director general of South Africa’s mines department, has summoned both Mick Davis, Xstrata’s chief executive, and Ms Carroll to an urgent meeting.  Many of the likely cost savings would be in South Africa and the unions there are close to new president Jacob Zuma. Government pension schemes own about 5pc of Anglo. Following the rebuff, Xstrata said: “We are also surprised that the Anglo American board has not seen fit to engage with Xstrata to discuss our proposal in view of the substantial value for both companies’ shareholders that would arise uniquely from a merger of the two companies.”  Confirmation of Xstrata’s approach, revealed in The Sunday Telelgraph, saw Anglo’s shares jump 12pc in early trade, but closed just 4.6pc ahead at £16.98 on concerns the deal might not go through.  It is also expected that competition authorities would require the disposal of Xstrata’s 24.9pc stake in platinum producer Lonmin, which prompted Lonmin shares to fall 102p to £11.48. Xstrata shares fell 48.9p to 635.1 on Monday.  The move by the Swiss-based group has also prompted speculation that Brazil’s Vale could now move in and make a counter offer for Anglo.
Anglo American has come out fighting, categorically rejecting Xstrata&rsquo;s &pound;40bn    plus merger approach as &ldquo;totally unacceptable&rdquo;.