Glencore's tie-up with Xstrata, in which it already owns a 34 percent stake, would be the largest deal in the sector since Rio Tinto's (RIO.L) acquisition of Alcan in 2007, but has faced opposition from some key Xstrata shareholders who say the terms do not recognize the company's potential.

"This is a merger of equals. Xstrata have got most of the senior jobs. Most previous mergers of equals were done at a ratio of equals - this deal ... has been done at a premium," said Glencore Chief Executive Ivan Glasenberg, who will become deputy chief executive in the combined group.

"We believe it is a fair deal, fair to all shareholders."

Glencore, addressing investors for the first time since the Xstrata deal was announced in February and ahead of a campaign of roadshows, confirmed full-year numbers given as estimates at the time of the merger announcement, including a 7 percent rise in net income to $4.06 billion and a trading profit dented by cotton losses and lower volumes in some metals.

The world's largest diversified commodities trader is offering 2.8 new shares per Xstrata share it does not already own. The offer is currently worth around 1,164.5 pence per share, compared to an Xstrata share price of 1,172 pence.

Glencore shares were down 1 percent at 415.9 pence at 0930 GMT, while Xstrata's were 2.1 percent lower, just below the UK sector down 1.9 percent .FTNMX1770.

Some investors took the view that Glencore's comments, made ahead of a series of meetings with Xstrata, made a higher offer unlikely for now.

"With a concerted program of Glencore and Xstrata shareholder meetings now set to follow, we feel expectations of an increased offer may dampen," Liberum analysts said.

Glasenberg said Glencore would focus in conversations with investors on its long-life, low cost assets - low-capital intensity is a relative rarity among miners as costs at major projects escalate - and on the riches to be reaped from the information held by its trading operations.

"We don't build mines for the sake of building mines. In Glencore we own a big portion of this equity - we are more focused on return on equity-type assets," he said.

"If you look historically at all our assets, we achieve a return on equity, or return on capital spent, better than any of the mining companies today."

Glasenberg said its trading division, far from being a "black box," provided a wealth of potential deal and growth opportunities for Xstrata.

"We deal with 7,200 suppliers, we see opportunities before anyone else does," he said. "The Xstrata shareholders are going to tap into this mass of information, knowledge."

STRONG START

That said, Glencore's trading arm saw an 18 percent drop in operating profit in 2011, but Glasenberg said 2012 had started "very strongly" for the division across all commodities, adding its key growth area of iron ore was looking "a lot stronger" in 2012.

Iron ore has been pinpointed as a key area of potential growth for the combined Glencore-Xstrata, though some analysts and industry watchers fret it may be too late for the trader and miner to break into a heavily concentrated business.

"We are not going to go into iron assets for the sake of growing iron ore production. It is going to be opportunistic," Glasenberg said. "When I was in coal, people told me it was too late to develop the coal business... there are always opportunities, you just have to find them."

Its industrial operations, where key development projects are on schedule and on budget, saw operating profit rise 18 percent.

Glencore increased mineral reserves at its Kazakh Kazzinc copper-gold operation, with three deposits showing a 50 percent increase in contained gold and 136 percent increase in contained copper, and said it expected to complete plans to raise its stake in the unit to 93 percent in the third quarter.

It will pay a total dividend for the year of $0.15 per share, netting Glasenberg, the company's largest single shareholder, just under $164 million.

(Editing by Mark Potter and Sophie Walker)

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