Rio Tinto and Glencore abandon $260 billion merger plan

Rio Tinto and Glencore abandoned their renewed $260 billion merger plan at the end of last week, according to The Guardian. The move could have created the world’s largest mining company.

Rio Tinto said it was no longer considering a merger or other business combination with Glencore after determining that it could not reach an agreement that would deliver value to its shareholders.

The other side, in turn, said that the key terms of the potential proposal, under which Rio Tinto would retain the positions of chairman and chief executive, “significantly undervalued Glencore’s underlying relative contribution to the combined group.”

The company added that the deal did not adequately value its copper business and growth prospects, so it concluded that the merger was not in the best interests of its shareholders.

This is the third time that talks to merge the two commodities giants have failed. The issue has been raised several times over the past two decades, with the idea first being floated shortly before the 2008 global financial crisis. Rio Tinto rejected Glencore’s merger proposal in 2014, and another round of talks in 2024 also came to nothing.

The latest talks between the parties resumed after Anglo American merged with its Canadian competitor Teck for $53 billion.

Under UK takeover rules, Rio cannot make a bid or take other takeover action for six months unless the Takeover Commission gives its consent or certain exceptions apply.

Earlier this year, Rio Tinto and BHP agreed to cooperate in the extraction of up to 200 million tons of iron ore in the adjacent Yandicoogina and Yandi areas in the Pilbara region.