According to Reuters, both companies have confirmed that they are discussing the possibility of a deal that may involve a partial or full acquisition of Glencore's stake by Rio Tinto. A stock exchange could be a potential deal option. If the deal goes through, the new combined company would become the largest in the world by market capitalization, surpassing BHP. In light of this news, Rio Tinto's shares fell by 6.4% in Australia.
As Bloomberg notes, the current negotiations come just over a year after previous discussions were unsuccessful. Company representatives stated that they are considering the possibility of merging both parts and the entire business, including acquisition through stock exchange. Additionally, according to Bloomberg, American depositary receipts of Glencore surged by 8.8% in New York, while Rio Tinto's shares dropped by 6.6% in Sydney.
Both publications emphasize that global players in the mining market are actively seeking to increase their metal reserves, such as copper, amid expected demand growth driven by the transition to new energy sources and the development of artificial intelligence technologies. It is reported that Glencore and Rio Tinto hold significant copper assets, and a potential deal could create a new mining giant capable of competing with BHP.
According to Bloomberg, discussions about the deal raise questions about which specific assets could be combined, considering that Glencore is one of the leading coal producers, while Rio Tinto has previously exited this segment. Furthermore, under British takeover rules, Rio Tinto has until February 5 to either confirm its intention to make an offer or withdraw from the deal for a period of six months.
