Glencore and Rio Tinto engaged in early-stage merger discussions last year, but the talks have since stalled, according to a source familiar with the matter. This move comes as global mining companies aim to increase their exposure to copper amid rising demand linked to the clean energy transition.
Key Highlights:
Merger Discussions:
Glencore approached Rio Tinto late last year regarding a potential merger, but the discussions were brief and did not progress further.
Bloomberg News reported on Thursday that these early talks had taken place.
Industry Context:
Global miners are actively seeking to expand their presence in metals like copper, which are anticipated to see increased demand due to the shift towards clean energy.
This trend was exemplified by BHP’s failed $49 billion bid for Anglo American last year, which collapsed due to structural issues within the proposed deal.
Potential Impact of a Merger:
A merger between Glencore and Rio Tinto would represent the largest deal in the mining sector, creating a combined entity valued at approximately $158 billion, surpassing BHP’s valuation of $126 billion.
Market Reactions:
Both companies have declined to comment on the merger discussions.
Following the news, Rio Tinto’s U.S.-listed shares fell by 0.7% in after-hours trading, while Glencore’s stock rose by 0.5%.
Historical Context:
This is not the first instance of merger considerations between the two companies. In 2014, Rio Tinto rejected a merger offer from Glencore that would have positioned the combined company as the largest miner globally.
Strategic Moves:
Last year, Rio Tinto made headlines by agreeing to acquire U.S.-listed lithium producer Arcadium for $6.7 billion, signaling its intent to pivot towards high-end, low-carbon raw materials as the leading iron ore producer.