Swiss-based resources group Xstrata plc has confirmed that it has been approached by and is in discussions with commodities group Glencore International plc regarding an all share merger of equals.

The company said yesterday that this may not lead to an offer being made by Glencore for Xstrata.

"There can be no certainty that any offer will be made," it said.

The news certainly seemed to please investors, as Xstrata's share price soared in London.

Shortly after 11am, Xstrata's share price was at 1.249.00 pence - up 129.5 pence, or 11.57%, while that of Glencore was up 16.45 pence, or 3.8%, at 448.20 pence.

In terms of the UK's City Code on Takeovers and Mergers, Glencore is now required, by no later than 5pm on March 1, to either announce a firm intention to make an offer for the company or that it has no intention to do so.

Xstrata is one of the world's largest mining and metals companies - a major producer of seven commodities used in everything from constructing buildings and delivering electricity to developing jet engines and mobile phones.

It operates in more than 20 countries and employs more than 70000 people globally.

Glencore is headquartered in Baar, Switzerland, and is one of the world's leading integrated producers and marketers of commodities. The group has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of metals and minerals, energy products and agricultural products.

Its customers around the world are active in a wide range of industries, such as automotive, oil, power generation, steel production and food processing.