Rio–Glencore takeover clock starts

The countdown has begun for what could be one of the most monumental deals in global mining, with Rio Tinto now operating under a formal takeover deadline after confirming preliminary merger discussions with Glencore.

In a statement, Glencore said it is “in preliminary discussions with Rio Tinto about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore”.

“The parties’ current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a court-sanctioned scheme of arrangement.”

A deal is far from certain, however, with both companies stressing there is “no certainty that the terms of any deal or offer would be agreed upon”.

That said, Rio Tinto must act quickly. Under UK takeover rules, because Glencore is listed on the London Stock Exchange, Rio Tinto has until 5:00 pm (London time) on February 5 to either announce a firm intention to make an offer for Glencore or formally walk away.

Any extension would require approval from the Takeover Panel. The Panel is an independent body that oversees UK-registered companies, ensuring all shareholders are treated fairly and provided with sufficient information to make informed decisions.

If completed, the merger would create a mining giant with an enterprise value of more than US$260 billion ($388 billion), according to the Financial Times.

Rio Tinto, the world’s largest iron ore miner, has a market capitalisation of about $US142 billion ($211 billion), while Glencore is valued at $US65 billion ($100 billion).

Copper, a critical metal in the transition to renewable energy, is set to be one of the keys of the deal.

Glencore produces roughly one million tonnes of copper annually, while Rio supplies 800,000 tonnes, making the potentially combined group responsible for around seven per cent of global copper production, according to the Australian Financial Review.

Glencore first approached Rio Tinto about a merger in 2024, but those discussions were short-lived. The current talks also mark an early test for Rio Tinto under new chief executive officer Simon Trott, who was appointed last year.

Glencore’s US-listed shares jumped nearly nine per cent after the announcement, while Rio Tinto’s US shares slipped by four per cent, reflecting investor caution as the takeover clock begins ticking.