Rio Tinto and Glencore abandon revived $260bn merger plan

"Rio Tinto said it was no longer considering a merger or other business combination with Glencore after it determined that it could not reach an agreement that would deliver value to its shareholders. Glencore said the key terms of the potential offer, which would have seen Rio keep both the chair and chief executive roles, significantly undervalued Glencore's underlying relative value contribution to the combined group."

"The company added the deal did not adequately value its copper business and growth pipeline, and concluded that the merger was not in the best interests of its shareholders. It marks the third time that talks to combine the two commodities giants have collapsed, after discussions were revived last month. Shares in Glencore fell by as much as 10.8% on the news, before recouping some losses, making them the biggest faller on the FTSE 100, while shares in Rio Tinto slid by 1.4%."

"Rio decided not to progress with the deal on Thursday, which marked the put up or shut up (PUSU) deadline, requiring it to make a firm offer for Glencore or walk away, unless both sides agreed to extend. Under UK takeover rules, Rio is prevented from making a bid or taking other steps towards a takeover for six months, unless the Takeover Panel consents or specific exceptions apply."

Rio Tinto and Glencore abandoned proposals for a $260bn merger after both sides concluded they could not agree terms that delivered value to shareholders. Rio Tinto determined it could not reach an agreement that would deliver value to its shareholders. Glencore said the proposed key terms significantly undervalued its relative contribution, particularly its copper business and growth pipeline, and therefore were not in its shareholders' interests. The decision followed a put-up-or-shut-up deadline and marks the third collapse of merger talks between the companies. Glencore shares initially fell about 10.8%, while Rio Tinto shares slipped 1.4%. Under UK takeover rules, Rio is barred from bidding for six months unless exceptions apply.

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