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Mining behemoths Rio Tinto and Glencore reportedly held merger talks last year, according to the Financial Times. The discussions, which took place as recently as October, did not progress further.
A potential merger between Glencore, with a market cap of £46.47bn, and Rio Tinto, valued at £164.99bn, would represent one of the largest transactions in the industry’s history, as reported by City AM.
The companies were allegedly exploring a partnership to better navigate the energy transition and secure access to metals essential for renewable fuel.
This news follows BHP’s decision to abandon its £39bn bid for Anglo American last May after the London-listed firm refused to divest its South African iron ore business and declined to extend takeover talks. The FT reports that Glencore owns stakes in two key copper mines, and any deal would be complicated by Rio’s recent exit from coal, an area where Glencore has significant exposure.
Last August, Glencore announced it had abandoned plans to spin off its coal business following overwhelming shareholder support to retain the division. In October, Rio Tinto was poised to acquire chemical producer Arcadium Lithium in a $6.7bn (£5.12bn) deal, given lithium’s importance in renewable batteries.
The company also faced pressure from Pallister Capital to relinquish its primary London listing, arguing its corporate structure had cost shareholders $50bn (£39.4bn) in value.
Matthew Haupt, a representative from Wilson Asset Management, questioned the logic behind the deal, saying it “didn’t make a lot of sense”. Glencore declined to comment, stating: “We do not comment on market rumour or speculation.”
Rio Tinto’s share price has decreased by 6.16 percent over the past year, while Glencore’s share price has experienced a more significant decline of 9.98 percent.
However, Glencore’s shares have shown a 4.12 percent increase in the last month.
