Rio Tinto and Glencore have abandoned plans for a $260bn merger, walking away from a deal that would 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 it “determined that it could not reach an agreement that would deliver value to its shareholders”.
Glencore said the key terms of the potential offer, which would have seen Rio keep both the chair and chief executive roles, “significantly undervalued Glencore’s underlying relative value contribution to the combined group”.
The company added the deal did not adequately value its copper business and growth pipeline, and concluded that the merger was not in the best interests of its shareholders.
It marks the third time that talks to combine the two commodities giants have collapsed, after discussions were revived last month.
Shares in Glencore fell by as much as 10.8% on the news, before recouping some losses, making them the biggest faller on the FTSE 100, while shares in Rio Tinto slid by 1.4%.
Rio decided not to progress with the deal on Thursday, which marked the “put up or shut up” deadline, requiring it to make a firm offer for Glencore or walk away, unless both sides agreed to extend.
Under UK takeover rules, Rio is prevented from making a bid or taking other steps towards a takeover for six months, unless the Takeover Panel consents or specific exceptions apply.
Rio, which was founded in 1873 and has an enterprise value of $162bn, said in January that the deal under discussion would have potentially resulted in it acquiring Glencore.
The mining company employs about 60,000 people across 35 countries, while Glencore – which was established in the 1970s as a trading company – has operations in more than 30 countries and a workforce of about 150,000 through employees and contractors.
The idea of combining the two companies has been raised several times over the past two decades and was floated the first time shortly before the global financial crisis in 2008. However, Rio rejected Glencore’s merger approach in 2014, while another round of talks in 2024 also came to nothing.
The most recent talks between Rio and Glencore resumed following the $53bn merger of the London-listed miner Anglo American with its Canadian rival Teck in September, which combined two of the world’s largest copper producers.
A Rio-Glencore merger would have created a global leader in metals including iron ore, copper, cobalt and lithium. The resources are critical in the production of technology products, including smartphones, at the centre of the boom in AI.
Copper prices have been extremely volatile in recent days, at times recording all-time highs above $14,000 a tonne, as analysts predicted there could be a supply shortfall of as much as 10m tonnes by 2040.
In December, Gary Nagle, Glencore’s chief executive, said the company’s aim was to become “the biggest copper producer in the world”. It is the world’s sixth-largest copper producer and the largest listed coal producer.
