Australian shareholders in Rio Tinto have welcomed the mining giant’s decision to end merger talks with Glencore, and said it is now up to the company to deliver on a new strategy that it has put so much weight on.
The proposed merger, first announced in January, would have created the world’s largest mining company, with a market value exceeding $200 billion. Rio said on Thursday the two companies could not strike a deal that delivered sufficient value to shareholders. While exact details of any bid were not made public, Rio’s investors had feared the miner, looking to build up its copper business, could pay too much to strike a deal with Glencore.
“This is positive that Rio appears to be disciplined in not overpaying,” said Andy Forster, Argo Investments’ senior investment officer. “It would have created a few years of complexity and uncertainty getting the deal done and integrated.” Rio Tinto’s Australian-listed shares rose as much as 2.6% to a record high in early trade, but pared those gains to be up about 1%. The S&P/ASX200 was down 2%.
