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Rio Tinto said in a statement on Thursday February 5 that it was no longer considering a possible merger or other business combination with Glencore, having determined that it “could not reach an agreement that would deliver value to its shareholders.”
The mining giant said it had assessed the opportunity “through the disciplined lens set out at its Capital Markets Day in December 2025 — prioritizing long-term value and delivering leading shareholder returns.”
Glencore’s share price on the London Stock Exchange fell by 8.92% to 465.60 pence on Wednesday, down from a previous close of 511.20 pence. Rio Tinto’s shares on the Australian Securities Exchange fell by 1.44% to A$157.13, down from a previous close of A$159.43.
Glencore’s board said in a statement on Wednesday that the parties were unable to reach agreement on the terms of a combination.
The key sticking points were Rio Tinto’s intention to retain both the chairman and chief executive officer roles and a proposed ownership structure that “significantly undervalued Glencore’s underlying relative value contribution to the combined group,” Glencore said.
The proposal did “not adequately value our copper business and its leading growth pipeline and [did not apportion] material synergy value potential,” according to Glencore.
“The fact that UK law gives the two parties only a limited time to agree to a deal, extend the talks or walk away, also likely played a role in shortening the negotiations. As companies become bigger and bigger, eating up their smaller rivals, the mergers that are left on the table become more complicated and perhaps more prone to failure,” Marex analyst Ed Meir told Fastmarkets on Wednesday.
Glencore defended its position as an independent company, saying its “standalone investment case is strong.”
“We have a well-diversified business across a range of commodities, supported by one of the best marketing franchises in the industry,” the company said.
Glencore highlighted its copper growth prospects, saying it has “an exceptional portfolio of copper projects, which provides a pathway from an already significant copper producer to become one of the world’s largest producers over the next decade.”
Fastmarkets calculated the weekly copper concentrates TC index, cif Asia Pacific — the midpoint between smelter and trader buying level — at $(76.60) per tonne on Friday January 30, down by $2.60 per tonne from $(74.00) per tonne a week earlier.
Similarly to when the potential merger was first announced in January, market participants expressed mixed views on this outcome.
Some believed it’s too soon to make a call about market impact. “Too early to tell, but I’m sure some folks will be relieved to hear. Now they can continue to deal with the same people,” a US-based consumer told Fastmarkets, echoing other comments heard from US-based market participants on Wednesday.
But others said the merger would have been positive and even believe that talks could resume, despite a lack of surprise that this round of talks failed. One European trader said Glencore indicated this outcome over the last few days.
“They were talking to the Canadian government about Horne smelter in Quebec — these statements were coming just two days before. We were not getting a good flavor already; we’re not surprised that it failed,” the trader told Fastmarkets.
“These [differences] can be ironed out in the coming six months and if the market stays in a similar way, we might see a revised proposal ticking most of the boxes that Glencore wants to see,” the trader added.
According to Jefferies analysts in a report published on Wednesday, despite the cultural issues, regulatory constraints and other complexities that make large mergers difficult to pull off, there was a strategic rationale for Rio Tinto and Glencore to merge.
“It is possible that the two companies reengage at some point in the future, but that is not our base case. Rio [Tinto] likely goes it alone. The question then is what is Glencore’s plan B? Coal demerger? Have discussions with another possible merger partner? Focus inward on its own copper portfolio?
“We believe there are various ways for Glencore to unlock value but getting acquired at a premium in an all-share deal to form a combined company that could have been the ‘go-to’ stock in the sector would have been the simplest and most elegant path to a significantly higher share price,” Jefferies analysts wrote.
Other participants say potential effects of this kind of merger collapse range from fragmented supply chains to split responsibility of execution across more entities and increased coordination costs, which in turn makes recovery from small failures harder and slower.
“When large-scale consolidation stalls, execution risk does not disappear. It moves downstream. [The decision to abandon the merger] is being discussed largely through a financial and regulatory lens. But for operators downstream — steel, cement, smelting and heavy industry — the more important signal is operational,” CEO of logistics company Magellan Contracting Services Kelly Byers said in a social media post on Wednesday.
Rio Tinto’s announcement was made under Rule 2.8 of the UK City Code on Takeovers and Mergers, which restricts the company from making a further approach for Glencore for another six months.
Rule 2.8 states that if a party publicly declares that it does not intend to make an offer for a company, it is bound by that statement under certain conditions and outlines the conditions under which such statements can be made and their implications.
The restrictions can be set aside if Glencore’s board agrees, if a third party announces an offer for Glencore, or if there is a material change of circumstances as determined by the Panel on Takeovers and Mergers, Rio Tinto said.
Glencore approached Rio Tinto about a possible merger in 2014, but the proposal was rejected on concerns over execution risk, coal exposure and balance sheet structure. A decade later conversations started up again but failed to progress.
The copper concentrates TC implied smelters purchase, cif Asia Pacific was assessed at $(50.72) per tonne on January 30, down by $2.60 per tonne from $(48.12) per tonne a week earlier.
The copper concentrates TC implied traders purchase, cif Asia Pacific was assessed at $(102.49) per tonne on January 30, down by $2.60 per tonne from $(99.89) per tonne a week earlier.
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