[miningmx.com] – RIO Tinto would demand a premium of as much as 30% from Glencore in order to seal a merger between the two, said Bloomberg News citing a former BHP Billiton executive, Alberto Calderon.
“The issue is mergers of mining companies generally don’t have synergies,’ said Calderon. “The only way you have synergies is when you have overlapping operations like BHP and Rio had at the Pilbara. This is not the case here. I don’t think Glencore could afford to pay that premium.’
“In terms of a merger of equals, is it good for Glencore? It’s pretty fantastic,’ Calderon said. “Is it good for Rio Tinto shareholders? It’s unlikely. They have the better assets. So they’re going to demand a premium of about 25 or 30%,” he said.
Rio Tinto said on October 7 that it had been contacted by Glencore in July about a possible combination of the two companies. Glencore announced on the same day that it was not considering a merger at the current time.
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