Swiss miner Glencore is reportedly close to engaging Citi as its lead investment bank on its potential acquisition by Rio Tinto. This deal could create the world’s largest miner, valued at over $200 billion. According to sources familiar with the matter, Citigroup Global Markets Inc. filed disclosures with the UK Takeover Panel in January, identifying itself as connected with Glencore Plc concerning a possible deal with Rio Tinto.
Citi and Glencore have declined to comment on the matter. Citi has a long-standing relationship with Glencore, advising the miner and trader on several major transactions. These include its 2011 initial public offering and, more recently, the buyout of Teck Resources’ coal business. Glencore is a multinational commodity trading and mining company headquartered in Baar, Switzerland. It produces and markets metals and minerals, energy products, and agricultural products.
Markets widely anticipate that Rio Tinto and Glencore may seek to extend the current deadline for a possible bid, given the scale and complexity of a potential deal. The two companies confirmed they were in early merger talks on January 8. Under UK takeover rules, a potential bidder has 28 days from being identified to either announce a firm intention to make an offer or walk away. The current deadline expires on Feb 5, though the parties could request an extension.
Other investment banks are also vying for advisory roles on the deal. Rio Tinto has already appointed JP Morgan, Evercore, and Macquarie to advise on the deal. Rio Tinto is a British-Australian multinational company that explores, mines, and processes mineral resources. Advisory roles on a deal of this magnitude are highly coveted as bankers jostle for a share of potentially more than $100 million in advisory fees.
