Glencore, Rio Tinto abandon merger talks

Rio Tinto has announced it is no longer considering making a bid for Glencore, a merger that would have created the largest mining company in the world.

The combined company would have an enterprise value of more than US$260 billion, according to the Financial Times, which first reported the news in early January.

But Glencore said Thursday it was unable to agree to terms on the merger.

“The Board of Glencore notes the announcement made by Rio Tinto plc and Rio Tinto Limited … earlier today confirming that it does not intend to make an offer for Glencore,” said a news release from Glencore on Feb. 5.

“The parties were unable to reach agreement on the terms of a combination.”

The key terms of the potential offer were Rio Tinto retaining both the chairman and chief executive officer roles, the release said.

‘Not in the best interests’ of shareholders

Rio Tinto also wanted “proforma ownership of the combined company which, in our view, significantly undervalued Glencore’s underlying relative value contribution to the combined group, even before consideration of a suitable acquisition control premium.”

“We concluded that the proposed acquisition on these terms is not in the best interests of Glencore shareholders,” Glencore said.

“It does not reflect our view on long term, through the cycle relative value, including not adequately valuing our copper business, and its leading growth pipeline, and apportioning material synergy value potential.”

Rio Tinto, the world’s biggest iron ore miner, has a market capitalization of about US$142 billion, while Glencore is valued at US$65 billion.

Glencore had approached Rio Tinto in 2024 about combining the two big copper producers but the discussions were short-lived.

Despite the merger not moving forward, the company said it was well-positioned as a standalone enterprise.

“We have a well-diversified business across a range of commodities, supported by one of the best marketing franchises in the industry,” the release said.

“We are uniquely positioned to support the energy needs of today whilst providing many of the transition-enabling commodities the world needs as demand changes.”