Post by Jack Farchy

Glencore Plc boss Gary Nagle has called it the most obvious deal in mining. His predecessor and mentor Ivan Glasenberg has been trying to pull it off for nearly two decades. And yet the merger of Glencore with Rio Tinto Group has proven elusive – until now. People familiar with the matter say that the current round of talks to create the world’s largest miner, which the two companies confirmed on Thursday night, are the most serious they have ever been, while emphasizing they are still at an early stage. At the heart of the shift is a concern within Rio that its iron ore-heavy portfolio could be left behind as copper M&A frenzy sweeps the sector, as well as a configuration of personalities on both sides who are better able to come to an agreement, the people said. When the deal was last seriously discussed in late 2024, the talks foundered over Rio’s unwillingness to pay a big premium, as well as differences in the cultures fostered by Rio’s then-CEO and the Glencore leadership. At the time, Glencore pushed for Nagle to run the combined company. Now Rio has a new boss and both sides appear more willing to compromise. Rio may ultimately consider paying a takeover premium, some of the people said, while other people suggested that the Glencore side is open to being pragmatic on the subject of management — recognizing that a larger firm paying a takeover premium would most likely seek to install its leadership in the new company. What’s more, a shift in investors’ attitudes toward coal mining means that Rio could buy Glencore outright with less fear of a backlash. Bloomberg earlier reported that Rio was open to retaining Glencore’s vast coal business. Still, talks are at a very early stage and the people cautioned that the two sides are still some way from reaching a deal. Even if they can, any combination would be highly complex and require the approval of numerous regulators at a time of heightened government scrutiny of natural resources. “It does feel like these two sides want a deal,” said George Cheveley, a portfolio manager at asset manager Ninety One, who owns Glencore shares. “Glencore have a lot of brownfield and greenfield copper projects and Rio don’t, but Rio have the expertise to build them and run them.” Thomas Biesheuvel Dinesh Nair Leonard Kehnscherper #riotinto #glencore #mining #mna #copper https://lnkd.in/e_97ZPfP