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'Somewhat of a surprise': Rio Tinto's $300b Glencore deal talks raises ASX alarms

Rio Tinto laid out a new “stronger, faster, simpler” strategy just last month. Now its plans to create a sprawling mega miner through a merger with its Anglo-Swiss rival have been given an early vote of no confidence.

Brandon How and Hugo Mathers
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The proposed merger talks between Rio Tinto and Glencore could be in tension with Rio's recently stated strategy of capital discipline. Supplied.

More than a year after sparking up talks over a possible merger, surging copper demand has brought Rio Tinto and Glencore back to the negotiating table.

But the move to create a $300 billion mega-miner has surprised some shareholders and analysts who say the move is completely at odds with the Anglo-Australian miner's recently articulated strategy shift.

Rio Tinto was the worst performer on the ASX 200 after the talks were disclosed on Friday morning. Its shares were down more than 6% in afternoon trade.

The two companies confirmed that they have opened “preliminary discussions” about a “possible combination of some or all of their businesses” despite Rio Tinto's shift to a more disciplined capital allocation strategy last month.