Rio Tinto has rejected a takeover approach from smaller rival Glencore Plc, snubbing a blockbuster deal that would have created a $160 billion (99.51 billion pound) mining and commodities trading giant, Reuters reported today.
Rio said on Tuesday that it was contacted about a potential deal in July, as the price of its most profitable product, iron ore, was heading toward 5-year lows. Glencore confirmed later that it had made a telephone call to gauge interest in “some form of merger.”
“Rio Tinto responded that it was not interested in pursuing these discussions,” Glencore said in a statement.
Glencore’s billionaire chief executive Ivan Glasenberg, who sources say had made the approach personally, was turned down in August, and Rio said there had been no further contact.
“The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($135.38) and a low price of CNY 830.00 ($133.77) per dry metric ton. For the fifth day in a row, the price of Chinese HRC remained essentially flat at CNY 3,030 ($488.35) per metric ton. The price of Chinese coking coal saw essentially no change for the fifth day in a row, remaining around CNY 1,390 ($224.03) per metric ton.
The steel billet cash price remained essentially flat at $450.00 per metric ton on the LME. The 3-month price of steel billet saw little movement on the LME at $455.00 per metric ton.
Following a quiet couple of days, the US HRC futures contract 3-month price fell 1.1% on Monday to $628.00 per short ton. The spot price of the US HRC futures contract dropped by 0.3% to $637.00 per short ton after holding steady.