Rio Tinto and Glencore Discuss Merger: The Largest Mining Company in the World May Emerge, - Bloomberg

- Recently, Rio Tinto and Glencore have begun preliminary negotiations about a potential merger that could create a mining leader with a market capitalization exceeding $200 billion. This was reported by Reuters and Bloomberg.

According to Reuters, both companies have confirmed that they are discussing a deal that may involve either a partial or complete buyout of Glencore's stake by Rio Tinto. It is expected that such a deal will be structured as a stock exchange. If an agreement is reached, the combined company could take the top spot among mining enterprises by market capitalization, surpassing BHP. In response to this news, Rio Tinto's shares in Australia fell by 6.4%.

Bloomberg reports that the current negotiations come more than a year after unsuccessful merger attempts between these companies. In their statements, the companies indicate the possibility of merging either part or all of the business, including options for acquisition through stock exchange. At the same time, Glencore's American depositary receipts on the New York Stock Exchange rose by 8.8%, while Rio Tinto's shares in Sydney fell by 6.6%.

The overall reports from both publications highlight the desire of global mining companies to increase their metal reserves, such as copper, in light of the expected growth in demand related to the transition to cleaner energy sources and the development of artificial intelligence technologies. Bloomberg also notes that both companies have significant assets in the copper sector, and a potential merger could create a new giant capable of competing with BHP.

According to Bloomberg, the discussion of the deal also raises questions about which assets may be included in the merger, considering that Glencore is one of the leading coal producers, while Rio Tinto has previously moved away from the coal business. Additionally, under British takeover rules, Rio Tinto has until February 5 to confirm its intentions regarding the proposal or withdraw from it for a period of 6 months.