Australia treasurer vows to block Glencore-Rio Tinto merger
Only hours before a British regulation blocking Glencore (LON:GLEN) from attempting again to grab Rio Tinto (LON:RIO) expired, the duo saw a new and powerful opponent to the eventual mega-merger appear: Australia’s Federal Treasurer Joe Hockey.
Rio's board rejected in July a merger approach from Glencore’s boss Ivan Glasenberg and has consistently rejected speculation of further talks going on between the two. After the move was revealed to the market in October, Glencore said it was no longer actively considering an offer, barring it from bidding for six months under British takeover rules. Such impediment is now gone.
The potential $160 billion deal could create a new mining mammoth, knocking BHP Billiton (ASX:BHP) off its throne. It would also add chunks to Glasenberg's already large bank account.
Some analysts estimate the companies could save up over $500 million if they were to merge just their coal operations in Australia. However Rio’s chief executive Sam Walsh has repeatedly said he believes a merger with the rival miner is simply “a poor strategic match.”
This wouldn’t be the first time Hockey blocks a major deal. In late 2013 he hindered a A$2.8 billion takeover bid for Australia's largest agribusiness, GrainCorp by Archer Daniels Midland Co, saying it was against the national interest.
Image: Screengrab from ABC News via You Tube.