Merger Talks Between Glencore and Rio Tinto
Glencore is in talks with rival Rio Tinto that could lead to a merger and the creation of the world’s largest mining company. Glencore issued a statement to the market shortly after reports emerged that merger talks had resumed, almost a year after the collapse of a previous round of talks.
Background of the Talks
There have been several attempts to reach a deal over the course of more than a decade. Glencore said it was working with its larger rival to explore a possible combination of some or all of its businesses.
Details of the Potential Merger
Glencore confirmed that it is in preliminary discussions with Rio Tinto about a possible merger of some or all of their businesses, which could include a full merger between Rio Tinto and Glencore. The parties currently anticipate that any merger transaction involving Rio Tinto’s acquisition of Glencore would occur by way of a court-approved agreement.
Uncertainty of the Deal
There is no certainty that the terms of any transaction or offer will be agreed, nor as to the terms or structure of such transaction or offer if agreed. Rio Tinto is required under the code to either announce its firm intention to make a bid for Glencore or withdraw by 5pm on February 5 at the latest.
Industry Context
The merger of Anglo American and Teck Resources has increased pressure to get a deal done, raising industry interests in the race to secure record copper prices amid rising prices for many raw materials, including rare earths. Rio Tinto also confirmed “preliminary discussions” and stated that there was no certainty about a deal.
