Glencore Xstrata Q&A: what's it all about? What's all this I hear about Glencore and Xstrata? The biggest mining deal in history is on the cards, if shareholders agree that Glencore and Xstrata can merge. Glencore is the massive commodities trading house which was the biggest company you'd never heard of until its record-breaking float last year. It was founded in 1974 by Marc Rich, the fugitive trader who was controversially pardoned in 2001 by then US President Bill Clinton just hours before he left office. As for Xstrata, it is the world's fourth biggest miner. If the two combine, they will create a commodities powerhouse, expected to be the number one predator in the mining world. These two companies aren't exactly strangers to each other though, are they? Xstrata was formed in 2002 when it bought Glencore's coal assets and Glencore has a 34.4pc stake in the miner. The two companies' CEOs, Glencore's Ivan Glasenberg and Xstrata's Mick Davis, have much in common: both South Africans and serious about their sports, they are used to working together. Some have described them as long-standing "frenemies," or, more traditionally, sparring partners. This all sound fun for those in the City - but why should I care? Some shareholders in Xstrata are not happy about what the deal means for them. Although it is billed as a "merger of equals," Glencore is offering a 15pc premium. That's not enough for Standard Life Investments, which has said it will vote against the deal unless the terms for Xstrata shareholders are "materially improved." Schroders, the fund manager, has also spoken out to say it intends to do "exactly the same," while various other anonymous shareholders have added to the grumblings. What does this mean for my pension? If you agree that both Glencore and Xstrata shareholders are getting a good deal out of this, that would mean benefits should feed through to their institutional shareholders, the fund managers in whose hands your pension may lie. But if you share the worries of one such investor, Standard Life Investments, that it looks like Xstrata's shareholders are getting short-changed, the worry is that the pensioners they represent are getting a bad deal. The reasoning is that Xstrata will be contributing the majority of the assets to the new Glencore-Xstrata group, but it is Glencore shareholders who will hold the bulk of the shares in the mega-miner. The controversy points to the wider debate in the City about shareholders are being heeded by company management. Isn't this all run of the mill though? Not necessarily. A more typical scenario would be that in the face of what seems a slim premium, the board of the company being acquired - in this case Xstrata - objects to the deal. But Mick Davis, who would head up the combined entity, is backing the merger. Of course, his opposition was never likely given that Glencore owns more than a third of a Xstrata and the long-standing working relationship between the CEOs. What next? Expect more tensions between Xstrata management and their shareholders as they push for a better deal. A big row is brewing, and the stakes are high. Glencore and Xstrata also say they don't envisage any problems with getting regulatory approvals from the competition authorities, but others suspect different given the scale of the mining behemoth the merger will create.