Rio Tinto and Glencore have called off their proposed $260 billion merger, marking the third failed attempt to combine the two mining giants. The deal, which would have created the world’s largest mining company, collapsed after Rio Tinto determined it could not reach an agreement that would deliver value to its shareholders, according to a statement released today, .
Glencore echoed this sentiment, stating that the terms of the potential offer “significantly undervalued Glencore’s underlying relative value contribution to the combined group.” Specifically, Glencore argued that the proposed deal did not adequately value its copper business and future growth prospects.
The collapse comes just weeks after talks were revived on , following a previous attempt that faltered in 2024. Prior to that, Rio Tinto rejected a merger approach from Glencore in 2014, and another round of discussions in 2024 also failed to yield an agreement.
News of the failed merger sent ripples through financial markets. Shares in Glencore experienced a significant drop, falling as much as 10.8% before partially recovering, making it the largest faller on the FTSE 100. Rio Tinto shares also declined, albeit more modestly, by 1.4%.
The decision by Rio Tinto not to proceed with the deal occurred on , which was the deadline – under UK takeover rules – for Rio to either make a firm offer for Glencore or withdraw from negotiations, unless both parties agreed to an extension. As a result of the failed bid, Rio Tinto is now restricted from making another offer for Glencore for at least six months, unless the Takeover Panel consents or specific exceptions apply.
The potential merger had been driven, in part, by the increasing demand for metals crucial to the technology sector, particularly copper. The combination of Rio Tinto and Glencore would have created a global leader in key metals including iron ore, copper, cobalt, and lithium – resources vital for the production of smartphones and other technologies at the heart of the artificial intelligence boom.
The timing of the discussions also coincided with significant volatility in copper prices, which have recently reached all-time highs, exceeding $14,000 a tonne. Analysts have warned of a potential supply shortfall of as much as 10 million tonnes by 2040, further fueling interest in consolidating copper production.
Glencore, which aims to become “the biggest copper producer in the world,” is currently the world’s sixth-largest copper producer and the largest listed coal producer. The company’s copper assets and project pipeline were a key point of contention in the negotiations, with Glencore believing its contribution was undervalued by Rio Tinto.
Rio Tinto, founded in 1873 and currently valued at $162 billion, employs approximately 60,000 people across 35 countries. Glencore, established in the 1970s as a trading company, operates in over 30 countries and has a workforce of around 150,000, including employees and contractors.
The collapse of this deal follows the merger of Anglo American and Teck Resources, a $53 billion combination of two of the world’s largest copper producers. This earlier consolidation signaled a trend towards increased scale in the mining sector, a trend that this latest development appears to temporarily halt.
The failed merger highlights the complexities of valuing companies in a rapidly changing commodities market, particularly as the world transitions towards cleaner energy technologies and increased demand for critical minerals. While the rationale for consolidation remains strong, aligning on valuation and future strategy proved insurmountable for Rio Tinto and Glencore this time around.
