Glencore‘s shares listed in London surged 8% on Friday morning after the confirmation of a potential $260 billion acquisition proposal from Rio Tinto.
Shares were noted to be slightly over 8% higher. Conversely, Rio Tinto’s shares in London saw a decline of 1.6% at the start, following a 6.3% drop in its Australian shares at the end of Friday’s trading session.
“Rio Tinto and Glencore have been holding initial talks regarding a potential merger of some or all of their operations, which may involve an all-share integration between Rio Tinto and Glencore,” Rio Tinto, the larger of the two entities, stated early Friday morning.
“The expected outcome from both parties is that any merger would occur via the acquisition of Glencore by Rio Tinto under a Court-approved scheme of arrangement.”
If finalized, this deal would form the largest mining firm globally. European mining stocks saw an uptick in early trading on Friday, with the Stoxx Europe Basic Resources index gaining around 0.5%. Copper mining company Antofagasta rose 3%, while Anglo American gained 2.3%.
CNBC has reached out to both entities for additional insights. Rio Tinto noted that it must state a firm intent to either bid for Glencore or confirm that it does not intend to do so by 5 p.m. London time (12 p.m. ET) on Feb. 5.
Discussions between Rio Tinto and Glencore regarding a merger took place in late 2024 but fell through due to disputes over valuation and the future of Glencore’s coal mining operations.
In August, Rio Tinto’s CEO Simon Trott revealed a reorganization within the company. Trott indicated plans to reduce expenses and free up to $10 billion from its assets by concentrating on three main product groups — iron ore, aluminum, and lithium and copper.
A merger between Rio Tinto and Glencore would continue the trend of recent M&A activities in the mining industry, following the merger agreement between Anglo American and Canada’s Teck Resources arranged for a $66 billion deal last September. This merger is anticipated to position them among the top five copper producers worldwide.
Resumed negotiations between Glencore and Rio Tinto have been driven by surging copper demand, with prices of the metal reaching a record high of $13,000 per ton this week.
