Rio Tinto has bolstered its share structure as it moves closer to a potential merger with Glencore, with major investors signalling confidence that a deal could be reached by the deadline.
Rio Tinto has strengthened its shareholder base and taken steps to reinforce strategic flexibility as merger discussions with Glencore continue, signalling readiness for a potentially transformative deal.
On the ASX this morning, the company issued new shares under its employee share plans. While a routine part of rewarding staff, these allotments also ensure Rio maintains a strong and aligned shareholder structure as it explores one of the mining sector’s most closely watched potential combinations.
It reflects confidence in the merger, as Glencore is primarily traded in London. London shares also offer greater liquidity and exposure to any combination, while Australian shares may be used in part to fund the transaction, potentially diluting existing local shareholders.
The Glencore merger is on a tight timeline, with a February 5 deadline under UK takeover rules. Sources suggest an extension is increasingly likely, giving both companies more time to work through details.
If the merger is completed, it would be one of the largest mergers in recent history, comparable to when BHP and Billiton merged back in 2001.