Glencore-Rio Tinto merger talks stall – report

Investing.com — Glencore (OTC:GLNCY) reportedly approached Rio Tinto (NYSE:RIO) late final 12 months a couple of potential merger to mix their copper operations, however discussions have since stalled, Reuters reported on Friday citing an individual accustomed to the matter.

The conversations between Rio Tinto, the world’s second-largest mining firm, and Glencore, a significant participant in coal and base metals, had been temporary and didn’t advance additional, the report mentioned.

Bloomberg Information reported on Thursday that the 2 firms had been in preliminary merger discussions. 

If accomplished, such a deal might mark the biggest merger within the mining sector, with their mixed market capitalization estimated at roughly $158 billion, exceeding BHP’s $126 billion valuation.

Mining firms globally are exploring choices to strengthen their positions in essential metals like copper, that are anticipated to see elevated demand amid the transition to cleaner power applied sciences. 

This was additionally the driving power behind BHP’s unsuccessful $49 billion acquisition bid for Anglo American (JO:AGLJ) final 12 months, which fell via because of structural points, the report mentioned.

Glencore, buying and selling close to £3.50 per share, is poised to reward buyers with capital returns this 12 months, following its $34 billion Viterra-Bunge merger, the report added. 

This isn’t the primary time the 2 firms have explored the thought of mixing their operations. In 2014, Rio Tinto declined a merger proposal from Glencore, citing shareholder pursuits as the first cause.

The continuing mergers and acquisitions in mining replicate the trade’s shift in the direction of renewable power. 

Rio Tinto’s $6.7 billion acquisition of Arcadium and Glencore’s $6.9 billion buy of Teck’s steelmaking coal enterprise exemplify this development, as firms restructure their portfolios to concentrate on low-carbon supplies and capitalize on evolving market calls for.