Glencore eyes finish line in marathon Xstrata deal

* Glencore, Xstrata shareholders to vote in Zug, Switzerland

* Glencore offering 3.05 new shares for every Xstrata share

* Vote on Xstrata "golden handcuffs" could fail

By Clara Ferreira-Marques

LONDON, Nov 20 (Reuters) - Shareholders in miner Xstrata are expected to give the green light on Tuesday to a long-awaited $31-billion takeover by commodities giant Glencore , paving the way for one of the largest tie-ups in the sector to date.

After nine months of tense negotiations, late-night talks and last-minute twists, the deal to create a mining and trading powerhouse is within Glencore's grasp - a personal victory for its biggest shareholder, key dealmaker and chief executive, Ivan Glasenberg, who will also lead the combined group.

The deal has been dragged back from the brink of collapse on more than one occasion since it was first proposed in February - most recently in September, when Glencore was forced to improve its offer to woo Xstrata's second-largest shareholder, Qatar.

Qatar said last week it would support the offer, increasing the chances the tie-up could be all but certain before the end of this week. That is, if a positive outcome at Tuesday's Swiss shareholder meetings is followed by approval from Europe's antitrust regulators, due to give their verdict by Thursday.

Though an unusually complex voting structure means a positive outcome on Tuesday is not guaranteed, analysts say the key question mark will be over a separate vote on a "golden handcuffs" retention plan for Xstrata managers; championed by the board, it is deeply unpopular with Xstrata shareholders.

"I think they'll get the deal done. I don't see a reason why not, as Qatar has said 'yes'," said analyst Nik Stanojevic at stockbroker Brewin Dolphin. But he added there was "certainly a chance" the retention plan would not get shareholder approval.

RISKS

A strong vote against the 140-million-pound ($223-million)plan would be an embarrassing blow for Xstrata's board, its outgoing chief executive, mining veteran Mick Davis, and for its chairman, John Bond, formerly of Vodafone and HSBC.

Bond argued the company needed the plan to ensure key managers stay on after the tie-up, as Xstrata is shifting to a period of organic growth - with large, complex projects in the pipeline - after a decade of acquisitions. Xstrata started with the $2.5-billion purchase of Glencore coal assets.

But the "golden handcuffs" have been lambasted by investors and risked sinking the tie-up, until a voting structure that had made the whole deal conditional on the pay plan was revised.

Qatar said last week it would abstain on the issue of retention pay, increasing the chances that that vote will not pass. Glencore will also not vote its shares.

Glencore, Xstrata's largest shareholder with a 34-percent stake, is offering 3.05 new shares for every Xstrata share to make good finally on its hopes of forging a mining and trading combine that can give it greater clout in global markets. The shares closed on Monday at prices implying a ratio of 2.92.

When Tuesday is over, however, shareholders and Glencore itself could be focusing on the task ahead, including potential non-core asset sales, an overhaul of Xstrata's project pipeline and even potential future deals. Glencore, Stanojevic said, is one of few "unashamed buyers" at a time of frugal spending.