Mining giants Glencore and Rio Tinto have confirmed they are in preliminary discussions about a potential mega-merger that could create the world's largest mining company. Glencore's shares surged by as much as 10% on Friday morning, while Rio Tinto's stock dipped by about 3%.
The talks could involve an all-share merger in which Rio Tinto would acquire Glencore. Glencore confirmed in a statement to shareholders: «Glencore notes recent media speculation and confirms that it is in preliminary discussions with Rio Tinto plc and Rio Tinto Limited about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore.» Rio Tinto separately confirmed it is «engaging in preliminary discussions about a possible combination of some or all of their businesses».
The combined entity would have a market capitalisation of approximately $200bn (£150bn). Under UK takeover rules, any formal bid must be submitted by February 5. The companies stressed there is no certainty a formal offer will ultimately be made.
Coal business complicates talks
A key aspect of the discussions involves Rio Tinto's willingness to acquire Glencore's substantial coal operations. Glencore ranks among the world's largest coal producers and recently expanded its coal business, while Rio Tinto previously retreated from the fossil fuel. Rio Tinto's openness to owning the coal assets removes one of the initial complexities associated with combining the two firms.
Previous consolidation attempts
The two mining companies previously held merger discussions in 2024, but those talks collapsed due to disagreements on deal conditions. The potential combination is part of a broader consolidation trend in the mining sector. Glencore made a $22.5bn (£16.8bn) bid for Canada's Teck Resources in 2023, which was rejected. Teck Resources has since agreed to merge with Anglo American, which itself rebuffed multiple takeover approaches from Australia's BHP Group.
The FTSE 100 index has risen on the news, with the mining sector receiving a broader boost from the merger talks.
Note: This article was created with Artificial Intelligence (AI).
