Rio Tinto and Glencore have abandoned their $260bn merger deal, scrapping plans to create the world's largest mining company. The move comes as a significant blow to both companies, with Rio Tinto now shelving its pursuit of a massive takeover following a disagreement over valuation.
According to Rio Tinto, it had decided not to progress with the deal after determining that an agreement could no longer deliver value to its shareholders. Meanwhile, Glencore felt that the key terms of the potential offer undervalued the company's underlying relative value contribution to the combined group. Specifically, the copper business and growth pipeline were deemed underpriced.
This marks the third time that talks between the two commodities giants have collapsed, with discussions resuming last month only to ultimately fizzle out. The deal had been touted as a major opportunity for both companies to become global leaders in metals including iron ore, copper, cobalt, and lithium – critical resources driving the boom in AI technology products.
However, Glencore's chief executive Gary Nagle had indicated that the company's ambition was to become "the biggest copper producer in the world", which only adds to the sense of disappointment among investors. Copper prices have been extremely volatile recently, with some all-time highs above $14,000 a tonne predicted by analysts.
As news of the collapse spread, Glencore shares plummeted 10.8% before recovering some losses, making them the biggest faller on the FTSE 100. Rio Tinto's shares slid 1.4%. The failure to reach an agreement has undoubtedly left both companies feeling frustrated and disappointed, with many now wondering if this deal will ever come back onto the table.
According to Rio Tinto, it had decided not to progress with the deal after determining that an agreement could no longer deliver value to its shareholders. Meanwhile, Glencore felt that the key terms of the potential offer undervalued the company's underlying relative value contribution to the combined group. Specifically, the copper business and growth pipeline were deemed underpriced.
This marks the third time that talks between the two commodities giants have collapsed, with discussions resuming last month only to ultimately fizzle out. The deal had been touted as a major opportunity for both companies to become global leaders in metals including iron ore, copper, cobalt, and lithium – critical resources driving the boom in AI technology products.
However, Glencore's chief executive Gary Nagle had indicated that the company's ambition was to become "the biggest copper producer in the world", which only adds to the sense of disappointment among investors. Copper prices have been extremely volatile recently, with some all-time highs above $14,000 a tonne predicted by analysts.
As news of the collapse spread, Glencore shares plummeted 10.8% before recovering some losses, making them the biggest faller on the FTSE 100. Rio Tinto's shares slid 1.4%. The failure to reach an agreement has undoubtedly left both companies feeling frustrated and disappointed, with many now wondering if this deal will ever come back onto the table.
... Just thinking about all that money going up in smoke is crazy 
. I mean, these two big players were basically saying they'd be the biggest copper producers in the world 
... but now it's like, 'oh wait, maybe not'. The volatility of copper prices is wild 
... one minute you're making all this cash, the next minute it's like, 'nope' 
. I feel bad for Glencore's CEO, Gary Nagle - he must be feeling super disappointed 
, but sometimes they just don't work out 
. Guess we'll just have to wait and see if this one gets revived in the future? 
. and now both are just gonna be stuck in the same old position they were before... i mean what's the point of even mergin if u can't even agree on the numbers? it's like tryna find a needle in a haystack, only to realize the needle is actually just a piece of string 
.
. It's like they were just one step away from creating the ultimate mining behemoth... and then BAM, copper prices skyrocket and suddenly everything falls apart 
. $260bn is a massive amount of money, but it's not like either of these companies really needs it to survive. And what's with all this focus on copper and other metals? Can't we just move towards sustainable energy sources already? The whole idea of creating the world's largest mining company just seems so... excessive 
.
But hey, at least Glencore's CEO was upfront about his company's goals - becoming the biggest copper producer in the world isn't exactly a pipe dream, is it? 
Copper prices have been all over the place lately and I'm not surprised they couldn't agree on a price 
.
. But now, it's just back to business as usual for Rio Tinto and Glencore 
. Their shares are taking a hit 
. Hope they try again in the future 
?
. Rio Tinto must be feeling pretty disappointed too, especially since they were all set to take on a massive takeover 
, like I cant even believe what just happened with Rio Tinto and Glencore 
! Their $260bn merger deal was like, supposed to be this huge game changer for both companies 
. Like, can u imagine becomin' the biggest copper producer in the world 