The next mega-merger is on the horizon in the commodities sector, and unsurprisingly, it’s primarily about copper. The red metal is crucial for the energy transition, and even without the energy transition, its consumption will increase significantly in the coming years, as the increasing urbanization of rural regions in Asia and Africa will lead to an increased demand for copper for power lines and electrical devices.
At the same time, capacities are limited. The industry’s internal growth is limited, as the exploration of new copper deposits has been criminally neglected in recent decades due to the comparatively low prices. The giants of the industry can only grow by swallowing smaller companies, which is a rather tedious, because time-consuming and expensive undertaking, or by two giants merging into an even larger company.
Rio Tinto (WKN 852147) and Glencore (WKN A1JAGV) already wanted to go down this path in the past. However, the merger failed due to internal problems. Now both sides are making a new attempt. The new talks already started last year. The Reuters news agency learned this from an insider. A takeover of Glencore by Rio Tinto as part of a share exchange is being discussed.
The merged group could replace BHP as the world’s largest commodities group
The planned merger would thus take place under British law, and should it be successfully completed, Rio would not only restore its connection to industry leader BHP, but even trump BHP, as it would create a group with a market capitalization in the region of US$207 billion.
So, there is a lot at stake again, but the hurdles are also high. Not only legal aspects must be considered. The atmosphere must also be right for a merger to succeed. Here, Glencore, a very results-oriented company, meets a new parent company that could certainly benefit from a stronger focus on results. In addition, a serious problem that currently stands unresolved between Rio Tinto and Glencore must be resolved: coal.
In recent years, Rio Tinto has focused very strongly on iron ore and has also made the copper sector a priority. Rio has regarded its own coal production as a superfluous marginal area and sold it to Glencore in 2018. It is obvious that they do not want to get this sector back again through the merger. Therefore, Glencore must either get rid of its coal division through a quick sale or a spin-off so that the planned merger with Rio Tinto can succeed.
Rio Tinto must first convince its shareholders in Australia of the merits of the acquisition
The atmospheric situation also improved significantly in favor of a merger last year due to the change at the top of Rio Tinto, as the new CEO, Simon Trott, who took office in August 2025, wants to make the group leaner. The plan is for Rio to divest assets beyond coal that are not part of its core business. However, even more important for the planned merger is that Simon Trott is considered more open to large deals compared to his predecessor, Jakob Stausholm.
However, the mistrust of the shareholders must also be overcome. This applies in particular to Rio Tinto, because after the information about the resumed merger negotiations became public, the shareholders in Rio Tinto’s Australian home market reacted with displeasure. They sent the share price on a significant downward slide with a daily loss of 6.3 percent.
On the other hand, investors in Glencore were enthusiastic about the idea of a takeover. In the USA, where most Glencore shares are traded, the share price rose by six percent after the news became known.
Rio Tinto has until February 5 to declare
Since Rio Tinto currently has a market capitalization of US$142 billion, while Glencore has “only” US$65 billion, the lead is clearly with Rio Tinto. Rio’s management now has until February 5, 2026 to either submit a formal offer to take over Glencore or to officially declare that it will not continue its advance to take over its competitor.
The critical attitude of Rio Tinto’s shareholders is of course a strong brake on the project at this point. In the background is the experience that large mergers, one only has to think of Bayer and Monsanto at this point, have repeatedly turned out to be a burden on the share price and thus value-reducing over time. Now there is concern that this will also be the case with Rio Tinto. On the other hand, the recently completed merger of Anglo American and Teck Resources makes it clear that there is a strong trend towards greater concentration within the copper sector and that a wave of consolidation is currently underway.
