Rio/Glencore deal likely off A deal aimed at capturing a bigger slice of the metals market, the proposed $160 billion merger of Rio Tinto and Glencore, appears doomed to fail, just as last year’s $50 billion attempt by BHP to acquire Anglo American also failed.
While not officially confirmed by either Glencore or Rio Tinto the potential deal has sparked financial market speculation but little investor support.
Unveiled during the trading hours of the Australian stock exchange where Rio Tinto is listed (along with London) the share price of the world’s second biggest miner slipped 0.7% lower to A$118.74.
Glencore is not listed in Australia with investors waiting for London trading to pass judgement which is not expected to be positive.
Like the move by BHP, the world’s biggest miner on Anglo American, a South African corporate hero, the obstacles of a Rio Tinto/Glencore deal are high and certain to spark endless government inquiries if proceeded with.
China, in particular, is certain to be wary of two major copper producers merging given the heavy dependence of its giant manufacturing sector on that metal.
Other countries with an interest in energy transition, where copper is in high demand thanks to its electrical conductivity, would also look closely at a Rio Tinto/Glencore merger which would create a business controlling 7% of the global copper market.
First report of Glencore and Rio Tinto exploring a merger was carried earlier today in a Bloomberg story and appear to be based on discussions held around the middle of last year, just after Anglo American officially rebuffed BHP’s overtures, but before a trigger date for a possible revival was reached late last year.