Rio pushes to retain executives in Glencore merger

RIO Tinto and Glencore remain in discussions over valuation and governance as talks to conclude a proposed $260bn merger are set to be extended beyond Thursday’s regulatory deadline, said the Financial Times.Rio is insisting that chair Dominic Barton and CEO Simon Trott retain their positions in any combined entity, whilst Glencore is demanding a substantial premium, said the newspaper citing people close to the negotiations. The differences mean the deal’s future remains uncertain although an analyst said there is a willingness to conclude it.The megadeal, which would create the world’s largest mining company, has been under discussion intermittently for 18 months but gained momentum after Trott became CEO late last year. Rio, whose profits are dominated by iron ore sales, is seeking to expand its copper operations through the acquisition of Glencore, the world’s sixth-largest copper producer, said the Financial Times.Commodity price movements over the past two years have complicated valuation discussions. Whilst low coal prices have depressed Glencore’s share price, rising copper and iron ore values have boosted Rio’s position.Glencore’s bargaining power has strengthened following its announcement of a nonbinding agreement to sell a 40% stake in its Democratic Republic of Congo copper-cobalt mines to Orion Critical Minerals Consortium for an implied enterprise value of $9bn, significantly exceeding analyst expectations.RBC analyst Ben Davis estimates a deal could value Glencore at approximately 582 pence per share, representing a 28% premium to its undisturbed price. “I think the deal absolutely still makes sense, as a strategic opportunity for Rio to secure copper options,” said Davis. “It gets trickier to stack it up, if the valuation remains high, but certainly I can see the motivation from both parties for getting a deal done.”The post Rio pushes to retain executives in Glencore merger appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com