Ivan Glasenberg, CEO of Glencore Plc (GLEN), is planning to make yet another offer for Rio Tinto Group, the world’s second-biggest miner. He approached Rio in July about a merger, and was rejected, Business Week Reported.
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A five-year low slump in commodity prices in Europe and China was behind Glasenberg’s original bid, and he still wants it. Data shows the resulting $160 billion entity coming out of the merger would capture BHP Billiton Ltd. (BHP) as the largest mining company, with a top-three position in producing energy coal, iron ore, copper, zinc and aluminum.
Top-ranked analyst on Rio Richard Knights of Liberum Capital Ltd. in London, told Bloomberg: “A potential deal would help Glencore materially de-leverage the business. What Glencore would want to do is to wait till next year for iron-ore prices to drop further and the commodity cycle to turn in their favor so that they can launch a bid with a big premium.”
In 2008, Rio rejected a 44 percent premium offered for a takeover by BHP Billiton Ltd.