Glencore Confirms It Is No Longer In Talks On Potential Merger With Rio Tinto

(RTTNews) - In response to media speculation, Swiss commodities trader and miner Glencore plc (GLEN.L, GLNCY, GLCNF) confirmed Tuesday that it is no longer in active talks on a potential merger deal with Anglo-Australian mining giant Rio Tinto plc (RTNTF, RIO, RIO.L, RTPPF).

Earlier in the day, Rio Tinto also confirmed that there has been no further contact between the companies on a merger since it rejected Glencore's approach in early August.

Glencore noted that it had made an informal telephonic enquiry to Rio Tinto in July in order to gauge its interest in discussing a potential merger between the two companies. A merger would have created a $160 billion mining behemoth.

However, Rio Tinto said then that it was not interested in pursuing any talks of a merger and rejected the offer, saying it was not in the best interests of Rio Tinto shareholders.

Rio Tinto, the world's second largest iron-ore producer, also confirmed earlier in the day that no talks are taking place with Glencore at present.

"The board's rejection was communicated to Glencore in early August and there has been no further contact between the companies on this matter," Rio Tinto said in a statement.

Rio Tinto chairman Jan du Plessis said "Under the leadership of Sam Walsh and Chris Lynch, Rio Tinto has made significant progress in refocusing and strengthening its business. The board believes that the continued successful execution of Rio Tinto's strategy will allow Rio Tinto to increase free cash flow significantly in the near term and materially increase returns to shareholders. Rio Tinto's shareholders stand to benefit from the very considerable value that this will generate."

Based on Glencore's regulatory filing on the LSE, Glencore is for a period of 6 months from the date of this announcement subject to Rule 2.8 of the City Code on Takeovers and Mergers in relation to Rio Tinto.

However, Glencore noted that it reserves its rights to make an offer in the future with the consent of the Takeover Panel, either with the recommendation of the Board of Rio Tinto, in the event of a third party offer for Rio Tinto, or in the event of a material change in circumstances.

In Tuesday's regular trading session, GLEN.L is currently trading on the LSE at $331.55 pence, down 7.80 pence or 2.30% on a volume of 37.70 million shares.

Meanwhile, RIO is trading on the NYSE at $49.04, down $2.43 or 4.72% on a volume of 7.43 million shares.