Rio Tinto and Glencore Hold Early Merger Talks
Rio Tinto has entered early-stage discussions on a possible acquisition of Glencore. This move could create the world’s largest mining group with a combined market value of nearly $207 bn.
The talks come as major miners seek to expand exposure to metals such as copper, which is expected to see strong demand from the energy transition and the growth of artificial intelligence. Industry consolidation has accelerated, with large players pursuing expansions and takeovers to secure future supply.
Deal Likely to Be All-Share
Rio Tinto and Glencore said a potential transaction would likely take the form of an all-share deal involving some or all of Glencore. They provided few details on structure, management or valuation and stressed there was no certainty that any agreement would be reached. Under UK takeover rules, Rio Tinto has until February 5 to make a formal offer or walk away.
Markets reacted cautiously. Glencore’s US-listed shares rose about 6% after confirmation of the talks, while Rio Tinto’s Australian-listed stock fell as much as 6.4%, its steepest intraday decline since July 2022.
Copper Focus Drives Strategic Interest
Rio Tinto, the world’s largest iron ore producer, is valued at about $142 bn, while Glencore, a major base metals miner and commodities trader, has a market capitalisation of roughly $65 bn. A combined group would surpass Australia’s BHP in market value.
Both companies have been shifting towards copper, seen as critical for decarbonisation and power-hungry technologies. Analysts said a key issue in any merger would be Glencore’s coal assets, which Rio Tinto exited in 2018. Some investors argue those operations would need to be divested to win shareholder backing.
Investor Concerns and Regulatory Hurdles
Concerns have also been raised about valuation and regulatory hurdles. Analysts warned Rio Tinto could overpay and face antitrust scrutiny, particularly from China, the world’s largest buyer of industrial metals.
Deal talks were revived late last year following changes in Rio Tinto’s leadership. The miner’s new chief executive, Simon Trott, has signalled a greater openness to large transactions while aiming to streamline the company’s portfolio. Investors said any agreement would hinge on price, strategic fit and the ability to bridge cultural differences between the two groups.
