Rio Tinto has confirmed that it is no longer in discussions with Glencore regarding a potential merger that would have established the world’s largest mining company. The decision marks the third time that talks between the two companies have ended without agreement, primarily due to an inability to reach terms that would benefit shareholders.
In a statement issued on Thursday, Rio Tinto informed its shareholders that it “is no longer considering a possible merger or other business combination with Glencore.” Following this announcement, Glencore’s shares experienced a significant drop, falling as much as 10.8 percent to £456 per share, while Rio Tinto’s shares decreased by 2.6 percent to £6,820 by 15:35 GMT (02:35 AEDT on Friday).
The two companies have a history of failed merger attempts, with Rio Tinto rejecting an initial offer from Glencore in 2014, stating that the proposal was not aligned with the best interests of its shareholders. Further discussions in 2024 also failed to yield a deal.
Glencore’s statement indicated that the key conditions of the potential deal included Rio Tinto retaining leadership roles for both the chairman and chief executive officer. The proposal, according to Glencore, undervalued the company’s contribution to the potential combined entity. The mining giant concluded that these terms did not serve the best interests of its shareholders.
The collapse of these merger discussions highlights ongoing challenges within the mining sector, which is currently under pressure to consolidate amid increasing demand for metals. Similar ambitious attempts have previously stumbled, as seen in BHP‘s failed US$49 billion bid for Anglo American, which fell apart due to concerns over the structure of the offer.
As the industry continues to grapple with consolidation efforts, the abandonment of this latest merger attempt serves as a reminder of the complexities involved in large-scale corporate negotiations in the mining sector.
