Glencore surges on Rio Tinto merger talks

(Sharecast News) - Miners Glencore and Rio Tinto confirmed on Friday that they are in preliminary talks about a possible combination of some or all of their businesses, which could include an all-share merger - a deal that would create the world's largest mining company with a $260bn valuation. Responding to press speculation, the companies said they would expect any merger to be effected through the acquisition of Glencore by Rio Tinto. This would make sense as Glencore's market cap is $65bn, while Rio is valued at about $142bn.

They added that there is no certainty that the terms of any transaction or offer will be agreed, nor as to the terms or structure of any such transaction or offer, if agreed.

Under UK takeover rules, Rio has until 1700 GMT on 5 February to either announce a firm intention to make an offer or walk away.

In 2014, Rio rejected a merger approach from Glencore, while talks between the two collapsed in 2024 after they failed to agree on valuation.

At 1105 GMT, Glencore was sitting pretty at the top of the FTSE 100 index, with shares up 9.8% at 453.50p. Rio Tinto shares were down 2.5% at 6,037p.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Last year's theme of consolidation in the natural resources sector has shown no sign of let up in the early part of 2026. In the same week we've seen Chevron make a swoop for Lukoil's non-Russian fossil fuel assets, Rio Tinto and Glencore have confirmed that the mother of all mining deals could be back on the table.

"Details are thin on the ground, but a deal could see Rio scoop up some or all of Glencore's assets. A full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium. But M&A isn't an automatic path to extracting value for investors, with Rio's Australian shares down 6% and Glencore ending Thursday in negative territory.

"The diverse asset base and likely synergies have the potential to provide further protection against commodity price fluctuations, but just how Glencore's coal and trading arms fit in with Rio's business model, and push for improved sustainability credentials, are key questions to answer."

Dan Coatsworth, head of markets at AJ Bell, pointed to potential culture clash issues between the two companies.

"The mining sector cannot give up on the mantra that bigger is better. Takeover talks between Rio Tinto and Glencore make sense from an economy of scale perspective, but the companies are worlds apart culturally," he said.

"Rio Tinto has tried to forge a path where the journey is all about fine tuning operations to make everything run efficiently, while also distancing itself from M&A mistakes of the past. It's seen as the wise old man of the sector, doing everything methodically.

"Glencore couldn't be any different with guns-a-blazing reputation. Its past is controversial, to say the least, with issues of bribery and market manipulation."

According to Bloomberg, citing people familiar with the matter, Rio is open to retaining Glencore's coal business if merger talks between the two companies are successful.

The move would represent a significant shift for Rio, which agreed to sell its last coal mines in 2018. Glencore is one of the world's biggest producers of coal.

It has large and attractive copper assets, but its coal business has long been seen as a likely hurdle for potential buyers.

Sources told Bloomberg that while the structure and scope of any deal is still being discussed, one of the key scenarios being considered is a takeover of the whole of Glencore including the coal business.

Sources said no final decisions have been made, however, and Rio could also choose to offload the coal business at a later date if a deal is successful.