It has been reported that talks with the potential to create a giant valued at approximately $260 billion have ended due to the parties' inability to reach an agreement on shareholder value.
In a statement, Rio Tinto announced that it is no longer considering a merger with Glencore or any other form of cooperation. The company stated it had concluded that a potential deal would not deliver sufficient value to its shareholders. For its part, Glencore indicated that the proposed structure failed to realistically reflect the contribution it would bring to the combined group.
Glencore emphasized that the strategic importance of its copper operations and their long term growth potential were not adequately reflected in the offer. The company stated that, for this reason, it determined the proposed merger would not align with the interests of its shareholders.
With this latest development, the effort to unite the two mining giants has now failed for the third time. The news was swiftly felt in the markets: Glencore shares initially plunged by as much as 10.8% before recovering slightly, yet still recorded the steepest decline on the FTSE 100 index for the day. Rio Tinto shares fell by 1.4%.
On the day the "put up or shut up" deadline under UK takeover rules expired, Rio Tinto opted not to submit a binding offer for Glencore. Under the regulations, unless granted approval by the Takeover Panel or a special exemption, Rio Tinto will be barred from making a new offer for Glencore or taking any acquisition related steps for the next six months.
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