Rio Tinto, Glencore talks fall apart, leading to the scrap of the mining mega-merger

Rio Tinto and Glencore have scrapped plans for a mega-merger that would have created the world’s largest mining company, valued at $232 billion as of the market capitalisations of $260. when the talks were first announced.

With a deadline for Rio to make a firm bid looming, year-long talks fell apart in less than 24 hours. Rio announced that it was no longer considering a merger or other business combination with Glencore after determining it could not reach an agreement that would deliver sufficient value to its shareholders.

Under the proposed structure, Rio would have retained both the chair and chief executive roles and secured pro forma control of the merged entity. Glencore said in a separate statement that those conditions materially undervalued its copper business and its overall contribution, making the deal unattractive for its shareholders.

The Swiss miner and commodities trader was also seeking a share-exchange ratio that would have given its investors about 40% of the combined company, Bloomberg reported.