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Rio Tinto
Rio Tinto and Glencore confirmed they are back in talks on a potential $260 billion megadeal that could create the world’s largest mining firm.
“Rio Tinto and Glencore are engaged in preliminary discussions about a possible combination of some or all of their businesses, which could include a merger of all interests between Rio Tinto and Glencore,” Rio Tinto, the largest of the two companies, said in a statement on Friday morning.
“The parties’ current expectation is that any merger transaction will be consummated by the acquisition of Glencore by Rio Tinto through a court-sanctioned scheme of arrangement.”
Rio Tinto shares in Australia fell 6.3% on Friday.
CNBC has reached out to both companies for further comment. Rio Tinto said it has until 5pm London time (12am ET) on February 5 to announce whether it intends to make a bid for Glencore or not.
Rio Tinto and Glencore have discussed a merger by the end of 2024, but talks have stalled over issues such as the price and future of Glencore’s coal mines.
In August, Rio Tinto CEO Simon Trott announced a restructuring of the business. Trott has pledged to cut costs and free up up to $10 billion in its asset base by focusing the company on three core product groups — iron ore, aluminum, lithium and copper.
The deal between Rio Tinto and Glencore adds to recent M&A activity in the mining sector, following Anglo American and Canada’s Teck Resources. agreed joining the $66 billion deal last September. The merger is expected to become one of the top five copper producers in the world.
Renewed talks between Glencore and Rio Tinto also weighed on rising demand for copper, with the red metal hitting $13,000 a tonne this week.