Rio Tinto’s bid to acquire Glencore has collapsed amid a dispute over who would manage the combined group, among other disagreements, marking perhaps the final episode in the on-again-off-again merger that would have been the biggest transaction in mining yet.
The merger would have created a $260bn mining behemoth and the world’s apex copper producer but that came to nought after Glencore said it had been undervalued in the proposed all-share transaction.
Glencore shares have surged 22% since the deal was proposed in January, but the stock underperformed the sector in 2025. It plunged more than 5% on the JSE on Thursday after the news — wiping out billions of rand in value.
“The key terms of the potential offer were Rio Tinto retaining the chair and CEO roles and delivering a pro forma ownership of the combined company which, in our view, significantly undervalued Glencore’s underlying relative value contribution to the combined group, even before consideration of a suitable acquisition control premium,” Glencore said in a statement on Thursday.
“We concluded that the proposed acquisition on these terms is not in the best interests of Glencore shareholders. It does not reflect our view on long-term, through-the-cycle relative value, including not adequately valuing our copper business and its leading growth pipeline, and apportioning material synergy value potential.”
Rio Tinto, the bigger of the two companies by market value, was more circumspect in its announcement of the deal collapse.
“Rio Tinto is no longer considering a possible merger or other business combination with Glencore, as Rio Tinto has determined that it could not reach an agreement that would deliver value to its shareholders,” it said in a statement.
This is the second major copper-inspired deal to collapse in less than two years. Anglo American thrice rebuffed the advances of BHP, the world’s largest mining company, as mining houses are scrambling to gain a competitive edge in copper production.
The base metal has enjoyed a spectacular rebound in recent years as it has become a crucial ingredient in the latest green energy technology. Lithium-ion batteries typically contain up to 15% copper by weight, while an electric vehicle’s battery pack can contain as much as 100kg of copper.
Battle of the egos
Business Day reported last month that one of the complications for the deal was that both companies are led by highly ambitious executives: Simon Trott of Rio and Glencore’s Gary Nagle.
Both are in their early 50s, with Trott having taken over the role of group CEO just six months ago. Both are princes wanting to be king.
Nagle took over the reins from fellow South African and Wits alumnus Ivan Glasenberg, Glencore’s single biggest shareholder.
The squabble over who should lead the merged entity confirms some of the market concerns when discussions between the two mining houses were announced in January.
At the time of the proposed deal’s announcement, analysts from Deutsche Bank had flagged that Rio and Glencore are very different culturally, “and so management structure and leadership could be issues”.
Two previous merger attempts, in 2014 and 2024, were made by Glencore, with Rio flipping the script in what would have been the biggest mining deal yet, dwarfing Glencore’s $90bn acquisition of Xstrata in 2013.
The collapsed deal comes amid huge consolidation in the copper industry,as mining majors look to take advantage of rising global demand for the metal, driven by the green energy transition.
Demand for copper, which is expected to increase 50% by 2040, has risen 40% over the past year.
Anglo American is also pursuing a merger — with Canadian copper producer Teck — in a deal worth about $50bn. The transaction, which has already been endorsed by both sets of shareholders, will create the world’s fifth-largest copper producer.
Lone wolf
Glencore, which has a market capitalisation of more than R1.43-trillion on the JSE, was also at pains on Thursday to highlight its business proposition as a standalone group.
“We are uniquely positioned to support the energy needs of today while providing many of the transition-enabling commodities the world needs as demand changes,” it said in Thursday’s statement.
“We have optimised and simplified our operating structures, which has promoted accountability and delivery, and supported our achieving, for the second consecutive year, full-year production for our key commodities within guidance range.
“We have continued to upgrade the quality of our portfolio of assets, have invested strategically in new opportunities, and we now have an exceptional portfolio of copper projects, which provides a pathway from an already significant copper producer to becoming one of the world’s largest producers over the next decade.”
Asset manager Coronation has said the group’s full market value isn’t reflected in its share price and that the company presented a “very compelling capital markets day at the beginning of December, showcasing the growth potential of its copper assets”.
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