The management of the world's largest seaborne exporter of thermal coal, Xstrata has indicated that it now favors a potential takeover by Glencore and has recommended that its shareholders approve the deal involving a US $31.9 billion takeover acquisition offer from Glencore.

Accoeding to several sources, Glencore will announce a new proposal for the takeover with conditions that satisfies investors, for approval from the shareholders in the company. The combining of the two companies will create world's fourth-largest mining company by combining Glencore's global trading operations with Xstrata's coal, copper, and zinc production. The joint entity will have more than 130,000 employees in more than 40 countries around the world.

Xstrata had recently indicated that it will cut around 600 jobs in its Australian operations under a restructuring plan. The cut will affect both external contractors as well as full time employees of the company's Australian coal operations.

Glencore chief executive Ivan Glasenberg had recently expressed surprised over the actions of Qatar Holdings, which increased its stake in Xstrata to 11.88 per cent and has almost caused a collapse of a takeover of Xstrata by Glencore. Glencore raised its offer to 3.05 of its shares for each one in Xstrata on September 7.

Glencore is a major commodities trading player that buys and sells commodities like metals, crops and fuels in the financial markets and invests in mining companies.