Rio Tinto says synergies, no Brexit behind decision to move sales team to Germany

Under CEO Jean-Sébastien Jacques, Rio has focused on cutting costs, generating cash and returning as much of it as possible to investors through dividends and share buybacks. (Image: Minerals Council of Australia | YouTube.)

World’s second largest miner Rio Tinto (ASX, LON:RIO) said its recent decision to consolidate the sales and marketing teams in London and other European countries into one located in Frankfurt, Germany, had less to do with Brexit than with “synergies.”

In an interview with Australian Financial Review (subs. needed), chief executive Jean-Sébastien Jacques said the plan was part of a wider reorganization, kicked off in February, which include the  setting of three global hubs for the company.

Rather than commenting on how the UK’s Brexit process may have influenced the move,  Rio’s leader cited marketing and commercial synergies as the main reasons why support staff currently based in London will relocate to Frankfurt beginning September.

Jacques, who has repeatedly said he has no plans to shift the group’s headquarters from the UK, or stop having an office in Melbourne, Australia, has centre all of his actions as CEO on improving productivity and keeping costs under control.

Partly because of that, Rio’s profit hit a three-year high in 2017 allowing it to pay a record dividend. It was the first annual report for Jacques, who took over from former boss Sam Walsh in July 2016.