The curtain falls again (and it's the third time) about the possible merger between Rio Tinto, one of the largest mining groups in the world active mainly in iron and industrial metals, and Glencore, an Anglo-Swiss giant in the extraction and trading of raw materials. At the deadline set by British regulations, the Anglo-Australian group has chosen todo not formalize any offer, archiving a $260 billion deal which would have redrawn the global geography of the mining sector by creating the world's leading group. official motivation It was entrusted to a concise but eloquent note: "it is impossible to reach an agreement that creates value for shareholders." In essence, no agreement on the price.
The deadline that marked the end of the negotiations
Rio Tinto had You have until February 5th to formalize an offer or take a step back.At the deadline, the most drastic choice was made. The discussions, which began at the beginning of January, they did not pass the Glencore valuation hurdle, deemed excessive by Rio, nor that of the command structure of the future group. An outcome which, in reality, the markets had already started to discount it in the previous weeks, with Rio investors unconvinced by an operation deemed expensive and complex.
The decision had a immediate impact on the stock marketIn London, Glencore shares fell more than 10% intraday before paring their losses at the close, while Rio Tinto posted a more modest decline of around 2,6%. This was a sign that the market was placing greater risk on the Swiss company should the deal fail.
Irreconcilable assessments and clash over command
Il the confrontation has run aground on two fronts. The first concerns governanceGlencore has not accepted Rio Tinto's request to keep its current chairman and chief executive officer at the helm of the new entity. The second one, decisive, it was the priceFor the Anglo-Swiss group, the evaluation proposed by the partner did not reflect the true value of the company, in particular that of the copper activities, considered central to the industrial portfolio.
The topic is far from marginal. Copper is al center of global industrial strategies, driven by electrification, the development of energy networks, and the expansion of data centers linked to artificial intelligence. It is no coincidence that the red metal prices they are travelling at all-time highs, fueling expectations of strong demand and a structural supply deficit. In this context, Glencore believes that its copper activities represent a strategic gift that Rio Tinto would not have valorized sufficiently.
What was Glencore asking for, what was Rio Tinto looking for?
According to rumors from Bloomberg, the Anglo-Swiss company aimed at a premium that will guarantee its shareholders approximately 40% of the capital of the post-merger groupA request deemed too onerous by Rio Tinto, which instead looks to the copper as a lever to rebalance a portfolio still strongly bound to iron ore.
The strategic interest was evident. Glencore is the world's sixth largest copper producer and controls key assets, such as the Chilean mine Collahuasi. This acquisition would have propelled Rio Tinto to the global top of the industry. But the valuation gap remained insurmountable, despite negotiations being considered more advanced than previous attempts.
A story that repeats itself, and the last word has not been said.
The one that just failed is not an isolated caseThe idea of a merger between Rio Tinto and Glencore has been circulating for over a decade, with attempts in 2008, in 2014 and more recently at the end of 2024, all stranded on the same rocks. Cultural differences, opposing management approaches, and a different perception of asset value have always prevented the circle from being closed.
At the moment, British rules bar Rio Tinto from returning to the fray for at least six months, except in exceptional circumstances. Glencore, for its part, claims the solidity of its stand-alone strategy. But, as the Financial Times observed, It is not excluded that the two parties may sit down at the table again in the future.
In the global mining industry, where scale and critical resources matter more and more, certain stories seem destined to resurface. Even when, for the umpteenth time, they hit a wall.
