Rio Tinto slumps after confirming merger talks with Glencore
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More news: Rio Tinto was the worst performer on the ASX 200 after confirming merger talks with Glencore, setting a 5 February deadline for a potential offer to create the world's largest mining company.
Shares have fallen 6.15% to $143.24 per share at 1:32pm AEDT.
Glencore, Rio Tinto confirm merger talks, set 5 February deadline
More news: Global commodities group Glencore and mining giant Rio Tinto have confirmed they are in preliminary discussions about a "possible combination of some or all of their businesses".
Anglo-Swiss multinational Glencore said a deal could include an all-share merger between the companies. The current expectation is that any merger would come via the acquisition of Glencore by Rio Tinto by way of a court-sanctioned scheme of arrangement, the companies said.
Rio Tinto is required to either announce a firm intention to make an offer for Glencore, or confirm that it does not intend to make an offer, by 5 February.
Glencore said there is no certainty that the terms of any transaction or offer will be agreed.
Glencore and Rio Tinto restart merger talks: FT
The news: Glencore and Rio Tinto have restarted talks over a potential merger to create the world's largest mining company, the Financial Times reported.
The context: The deal, which was under discussion as recently as this week, would create a merged entity with an enterprise value of more than USD260 billion ($388 billion), the report said, citing people familiar with the matter.
The exact contours of a potential deal could not be determined, it said.
Commodities giant Glencore and dual-listed Rio Tinto were reportedly in early-stage talks at the start of last year about combining the two businesses. Glencore had previously proposed a merger with Rio in 2014, but that offer was rejected by the miner.
Both Glencore and Rio own some of the best copper mines in the world. However, Rio — like BHP — still depends heavily on iron ore to drive its profits, at a time when China’s decades-long construction boom is drawing to an end.
The sources: Financial Times, Glencore media release, ASX
