Glencore Nears Citi Deal for Rio Tinto Merger Talks

Key Developments

Swiss mining giant Glencore is reportedly close to appointing Citi as its lead investment bank for potential merger discussions with Rio Tinto. This move could create the world's largest mining company, valued at over $200 billion.

Situation Overview

According to filings with the London Stock Exchange, Citigroup Global Markets Inc. has already disclosed its connection to Glencore regarding a possible deal. Citi has a long-standing relationship with Glencore, having advised on its 2011 IPO and the more recent buyout of Teck Resources’ coal business.

Market Impact

The appointment of major investment banks signifies a serious step toward a potential mega-merger. Rio Tinto has already retained JP Morgan, Evercore, and Macquarie. The advisory fees for such a landmark deal could exceed $100 million, making it a highly coveted mandate for financial institutions.

Summary

The current deadline for a formal offer under UK takeover rules is February 5, though an extension is considered likely given the deal's complexity. The market is closely watching for official announcements from Glencore and Rio Tinto as they navigate this potential industry-shaping transaction.

FAQ

Q: Which banks are involved in the potential deal?
A: Glencore is close to engaging Citi, while Rio Tinto has appointed JP Morgan, Evercore, and Macquarie as its advisers.

Q: What is the potential value of the merged company?
A: The combined entity could be valued at over $200 billion.

Source: Investing.com