Rio Tinto is in early talks to buy Glencore, the companies said, in what could create the world’s largest mining company with a combined market value of nearly $207bn (R3.4-trillion). Global miners are racing to bulk up in metals including copper, set to benefit from the energy transition and artificial intelligence demand. That has sparked a wave of project expansions and takeover attempts, including the pending merger of Anglo American and Teck Resources to create a copper-focused industry heavyweight.
Rio Tinto and Glencore revealed little on what a tie-up might look like, including which assets could be included, in what is the second round of talks in just over a year between the two after Glencore approached Rio Tinto in late 2024 for a deal that did not ultimately proceed. The companies said late on Thursday the expectation was it would involve an all-share buyout of “some or all” of Glencore by Rio Tinto. They did not disclose whether there would be a takeover premium or who would manage the combined company if the world’s largest-ever mining deal was completed.
“The structure of a possible merger between these two companies is unclear and would likely be complex, but we do believe there is a path to significant value creation for both,” Jefferies analysts wrote. The companies said there was no certainty the terms of any deal or offer would be agreed on after the Financial Times first reported the revived talks. Under UK takeover rules, Rio Tinto has until February 5 to make a formal offer for Glencore or say it will not proceed.
Read Full Article on Business Day
[paywall]
US-listed shares of Glencore were up 6% after the talks were confirmed. However, Rio Tinto’s Australian-listed shares fell as much as 6.4% in the biggest intraday fall since July 2022 against a broader positive market. “The share market tells you what you want to know.
Investors are not happy with this,” said Hugh Dive, chief investment officer of Atlas Funds Management, a Rio Tinto shareholder. Rio Tinto, the world’s biggest iron ore miner, has a market capitalisation of about $142bn (R2.3-trillion). Glencore, one of the world’s largest base metal producers, is valued at $65bn (R1bn) as of its last close. Rio Tinto and Glencore are shifting their focuses toward copper, a commodity expected to be in high demand as the world adopts greener forms of energy and the take-up of power-hungry AI gains ground.
[/paywall]
