Rio Tinto walks away from proposed $260bn Glencore merger

“Further to the announcement of 8 January 2026, Rio Tinto plc and Rio Tinto Limited (together, ‘Rio Tinto’) confirm that Rio Tinto is no longer considering a possible merger or other business combination with Glencore plc (‘Glencore’), as Rio Tinto has determined that it could not reach an agreement that would deliver value to its shareholders.” The company said it had “assessed the opportunity and came to this view through the disciplined lens set out at its Capital Markets Day in December 2025 – prioritising long-term value and delivering leading shareholder returns.”

The terse statement, issued after weeks of negotiations, brings to an end a deal that at one point was framed as a potential USD260 billion combination that would have created the world’s largest mining company. Talks collapsed at the so-called put up or shut up deadline that required Rio to either table a firm offer or walk away.

Glencore’s board responded that the terms on offer were unacceptable. The company said the proposed terms “significantly” undervalued Glencore’s underlying relative value contribution to the combined group and that it had “concluded that the proposed acquisition on these terms is not in the best interests of Glencore shareholders.” Glencore added that the proposal “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.” Reports during negotiations indicated Rio had proposed retaining both the chair and chief executive roles in a merged entity, a governance arrangement Glencore viewed as dilutive to its negotiating position.

The announcement invoked formal takeover rules. The notice filed under Rule 2.8 of the City Code on Takeovers and Mergers flagged that the announcement contains inside information. Under the Takeover Code Rio must now wait at least six months before making a firm offer for Glencore and cannot participate in competing or joint offers unless a third party announces a formal bid or Glencore’s board gives consent.

Markets moved sharply on the news. Initial London trade saw Glencore shares plunge by more than 10% while Rio’s shares were largely steady. Other intraday snapshots from different exchanges and ticker formats showed more mixed moves, with Rio down in some listings and Glencore off by smaller amounts, reflecting timing and venue differences in trading data.

The failed talks revive a long history of attempted combinations between the two firms. Rio, founded in 1873, has an enterprise value estimated at roughly USD162 billion and employs about 60,000 people across 35 countries. Glencore, which began as a trading house in the 1970s, operates in more than 30 countries and relies on a workforce of about 150,000 including contractors. Observers note that merger interest has surfaced repeatedly over two decades, with approaches or discussions reported around 2008, 2014 and again in 2024.

With the merger off the table, attention will shift to near-term strategy. Market briefings and commentary expect Rio to refocus on internal priorities, including targeting roughly $650 million of annualised productivity gains by the end of the first quarter of 2026, seeking an opportunistic cash release of $5–10 billion, maintaining a 40–60% dividend payout ratio and continuing to reduce net debt, which stood at about $14.6 billion in the first half of 2025. Glencore may explore alternate routes to unlock shareholder value, including asset adjustments, potential demergers and M&A aimed at strengthening its copper pipeline.