RIO Tinto terminated merger discussions with Glencore on Thursday after refusing to offer a control premium for the Swiss headquartered business.
In its announcement, Rio Tinto said “it could not reach an agreement that would deliver value to its shareholders”.
“Rio Tinto assessed the opportunity and came to this view through the disciplined lens set out at its Capital Markets Day in December 2025 prioritising long-term value and delivering leading shareholder returns,” it said.
Glencore shed more light on the failed discussions, however, saying in a statement that it would have expected a control premium for its shares because a key element of Rio’s offer was to nominate a board chair and CEO, presumably its incumbent Simon Trott.
When Rio Tinto announced on January 8 that it had opened talks with Glencore, it said that a merger would be affected through an offer of shares. The response from some investors in Australia, however, was that a premium would not fly.
“In our view, no premium can be paid whatsoever,” said John Ayoub, portfolio manager at Wilson Asset Management at the time. He argued Rio had stronger assets and that shareholders “need to be compensated for that dilution via those synergies not paying them away”.
Said Glencore today: “The key terms of the potential offer were Rio Tinto retaining both the chairman and CEO roles and delivering a proforma ownership of the combined company which, in our view, significantly undervalued Glencore’s underlying relative value contribution to the combined group, even before consideration of a suitable acquisition control premium.
“We concluded that the proposed acquisition on these terms is not in the best interests of Glencore shareholders”.
Glencore added Rio Tinto’s offer did not reflect its “through the cycle relative value, including not adequately valuing our copper business, and its leading growth pipeline, and apportioning material synergy value potential”.
“Glencore’s standalone investment case is strong,” it added.
In December, Glencore unfurled projects in copper that would see it produce 1.6 million tons annually by 2035, enough to make it the largest miner of the metal globally. “We have a clear pathway for our base copper business to exceed one million tons of annual production by the end of 2028, with a target to produce approximately 1.6Mt tons by 2035,” said Gary Nagle, CEO of Glencore.
Under the terms of the UK takeover code, Rio Tinto had until today to make an offer for Glencore, or state that it does not intend to do so. In terms of the regulations, however, it can reopen discussions in the event a third party steps in with a bid for Glencore.
