Glencore slides as Rio Tinto merger talks collapse
Price dispute over copper assets scuttles potential $200bn mining mega-deal
Glencore shares fell 10% after the Swiss commodities giant abandoned potential merger discussions with Rio Tinto, as disagreements over valuation and governance ended what would have been one of the mining industry's largest-ever corporate combinations.
The talks, which had been under negotiation since January 2026, officially collapsed on February 5 when Rio Tinto declined to make a firm offer under UK takeover rules. The London-listed mining company stated it could not reach an agreement that would deliver sufficient value to its shareholders, according to an official statement from Rio Tinto.
The proposed all-share merger, which would have seen Rio Tinto acquire Glencore, foundered primarily on disputes over how to value Glencore's copper business. Despite Glencore's ambitious plans to significantly increase copper production over the next decade, Rio Tinto had concerns about the company's recent copper performance, including underperformance and declining output in previous years, according to analysis from IndexBox. The valuation discussions were further complicated by surging copper prices, making it difficult for both sides to agree on a fair exchange ratio.
Governance also emerged as a significant sticking point. Rio Tinto insisted on retaining its current chairman and chief executive in a combined entity, a demand Glencore ultimately could not accept, according to MiningMX.
This marked the second time merger talks between the two mining giants had failed. Previous discussions in 2024 also collapsed over valuation disagreements, highlighting persistent challenges in combining two companies with markedly different corporate cultures and strategic priorities.
Analysts had long flagged several obstacles to a successful tie-up. The integration of Glencore's substantial coal portfolio into Rio Tinto's operations presented a particular challenge, given Rio Tinto's strategic exit from coal in recent years. Industry observers noted this represented a significant cultural and strategic misalignment that would have required complex post-merger restructuring.
Regulatory concerns also loomed over the discussions. The sheer scale of the combined entity would have triggered extensive scrutiny across multiple jurisdictions, particularly given both companies' dominant positions in key commodities markets. Market analysts warned that a deal of this magnitude could have faced years of regulatory challenges and forced asset divestitures.
For Glencore, the collapse of the talks represents a significant strategic setback. The company had been positioning itself for a transformational deal that would have accelerated its shift toward cleaner commodities and provided greater financial stability through diversification. However, some analysts viewed the end of discussions as potentially beneficial for Rio Tinto, allowing it to avoid what may have been an overvalued acquisition with substantial integration risks.
Prior to the announcement, analyst sentiment toward Glencore remained mixed. Morningstar UK had set a fair value estimate of £4.60, with shares trading around £4.96 in late January, while MarketBeat reported a consensus price target of approximately 393.33 GBX. Individual analysts had been more optimistic—Berenberg maintained a "Buy" rating with a 4.80 GBX target on February 4, and RBC Capital had a "Buy" rating with a 5.40 GBX target on February 3.
The failure of this deal underscores the continuing challenges facing mining sector consolidation, even as companies seek greater scale to finance the energy transition and capital-intensive new projects. While the mining industry has seen significant deal activity in recent years, mega-mergers of this scale remain rare due to the complex interplay of valuation, governance, regulatory, and cultural considerations.
For now, both companies will need to pursue their strategic objectives independently. Glencore will continue executing its copper expansion plans as a standalone entity, while Rio Tinto maintains its focus on its existing portfolio of high-quality assets. The collapse of the talks removes a major source of uncertainty for both companies' shareholders, but also eliminates what many industry observers saw as a compelling opportunity to create a dominant force in global mining.