Mining giants Rio Tinto Ltd (ASX:RIO) (LSE:RIO, ASX:RIO, OTC:RTNTF) and Glencore PLC (LSE:LON:GLEN) have reportedly engaged in preliminary discussions about a potential merger, Bloomberg reported on Thursday, citing sources familiar with the matter.
The talks, which remain in the early stages, could pave the way for the mining industry’s largest-ever deal, reshaping the global landscape. Both companies rank among the world's leading iron ore miners and have extensive portfolios spanning various commodities.
While the financial terms of the potential combination were not disclosed, Bloomberg indicated that the merger could be valued at approximately £150 billion. The report added that it is unclear whether the discussions are still ongoing, as the matter remains confidential.
The rumors of a merger surfaced later on Thursday, following earlier commentary from Jefferies analysts about Glencore's strategic outlook. "Glencore has been a main topic of discussion in our recent meetings," the analysts noted. "This follows a year during which its shares significantly underperformed. What will turn this around, especially if we are in an environment of range-bound commodity prices for now? A share buyback would help, and Glencore should have the financial capacity for large capital returns starting in 2H. Other outside-the-box options may be considered."
If realized, the merger would consolidate two of the mining sector's most prominent players, potentially redefining competition in key markets such as iron ore, copper, and coal.
Rio Tinto and Glencore have not commented publicly on the report.
US-listed shares of Rio Tinto fell over 1.5% on Thursday afternoon following the report while Glencore’s US-listed shares jumped over 6% over the counter.