Glencore is open to negotiations as investors push for more mining M&A.
By Clara DeNina and Pratima Desai
LONDON (Reuters) – Mining and commodities trader Glencore said it is open to M&A transactions that create value for shareholders, maintaining its position as a top three global copper producer.
“As we’ve always said, M&A is something we’re good at and we’re always open to transactions that add value to the company,” a Glencore spokesman said.
Potential M&A deals 2024 has been a major focus for investors in the sector, but BHP’s $49 billion bid for Anglo America in May highlighted the difficulty of combining different producers.
Glencore approached Rio Tinto late last year with a proposal to merge the two mining companies, but talks have not progressed, according to two sources close to the matter. Neither company has commented on any of the talks.
A spokesman did not comment on the reports.
Rio Tinto would benefit from a deal with Glencore to produce more copper, but the world’s second-biggest miner had questions about how much to mine and cultural compatibility with the Swiss company, a third source with direct knowledge of the matter said. .
“Glencore is a trader … and their assets are nothing but a captive source of material to be traded. The culture clash will be one thing … but any deal can be done at the right price,” Abel said. Martins Alexander, formerly Treasurer of Rio Tinto and former Managing Director at Lloyd’s Bank.
For example, if Martins Alexander Glencore owns the Rio Tinto portfolio, they may believe that they can make more money by trading Rio Tinto’s products because Rio Tinto is not the sole producer of the business.
Mining companies are racing to expand copper production, with demand poised to harness it for energy conversion applications such as solar panels, electric cars and artificial intelligence data centers.
At the same time, major manufacturers are wary of paying high premiums, which could strain their balance sheets and upset shareholders.
Glencore produces more than one million metric tons of copper annually, up to 40 percent more than Rio’s output.
Glencore is cheap compared to its peers, analysts say, and its share price is up 25% since 2016.
Glencore’s coal operations are seen as a “poison pill” for other companies’ shareholders, Martins-Alexander said.
