Rio Tinto and Glencore abandon £200bn mega merger over valuation issues

Rio Tinto and Glencore have abandoned plans for a £200billion mega merger that would have created the world’s largest mining group.

In a statement, Rio Tinto said it ‘could not reach an agreement that would deliver value to its shareholders.’

It is the third failed attempt to merge the commodities giants after talks failed in 2014 and 2024.

Glencore said the key terms of the potential offer, which would see Rio Tinto retaining both chairman and chief executive, ‘significantly undervalued’ its contribution to the combined group.

The £200bn merger would have created a copper and mining giant 

It added that Rio Tinto had not adequately valued Glencore’s copper business and growth pipeline and therefore was ‘not in the best interests of Glencore shareholders.’

The proposed tie-up, which was revealed last month, would have created a mining and copper powerhouse with operations all over the world. 

The merger would have been valued at close to £200billion including cash and debt. 

The price of copper, which has multiple uses including in solar panels, has soared to record highs before pulling back.

While both Glencore and Rio Tinto are big copper producers, analysts had previously warned that a merger could prove difficult.

Maurizio Carulli, global energy and materials analyst at Quilter Cheviot, said that the integration would be ‘far from straightforward given the stark differences in corporate culture and the diversity of their asset bases.’

In its statement today, Glencore said its ‘standalone investment case is strong’ with a ‘well-diversified business across a range of commodities.’ 

Shares in Glencore plunged 8.5 per cent following the news.

This is a developing story