The big news for UK markets today has been confirmation that Rio Tinto and Glencore are in talks about a potential combination of some or all their businesses, including Glencore’s coal business.
Rio may have overcome valuation concerns for second bid for Glencore
While the structure and scope of any potential deal has not been disclosed, Rio Tinto has not ruled out acquiring all of Glencore. As the copper price has surged to record highs, demand for Glencore has risen, with this potential deal the latest in a wave of dealmaking activity in the commodities space. Two years ago, a prior takeover bid for Glencore by Rio fell apart over valuation concerns. The fact that Rio has come back to the table, and Glencore has not dismissed the idea of a sale, could be a sign that the price may be right this time.
Share price reaction from deal news
Typically, the acquirer of a big deal like this sees its share price fall when a deal or hopes of a deal is announced. Rio’s share price is lower by 2.5% so far today. In contrast, the acquisition target tends to see its stock price rise when a deal or potential deal is made public, and Glencore’s share price has surged on Friday and is higher by more than 10%.
What happens to the share price next will depend on a few things:
1. Will the deal go through? If it drags on without any progress, we could see Glencore’s share price rally pause or even go into reverse. This could boost Rio’s share price.
2. What will be the regulatory hurdles? This could scupper any deal and potentially limit its scope, which may also weigh on Glencore’s share price, and it could give up some of these early gains. Likewise, Rio’s share price decline could be limited if regulatory concerns suggest that the deal won’t go through.
3. The deal eventually goes through: although we still don’t know key details like the price or what’s actually for sale, if Rio is planning to buy Glencore, Glencore may not accept their first offer and may push Rio to boost the price they will pay. Every increase in the offer price could also boost Glencore’s share price.
What Warner Bros saga can tell us about Rio and Glencore price action
While the details of the deals are very different, it is worth re-looking at the market reaction of the drawn-out battle between Netflix and Paramount Skydance to acquire Warner Brothers Group. This deal is still not cocomplete with Warner Bros continuing to rebuff Paramount’s higher offer in favour of Netflix.
Like Glencore/ Rio, this is a high-profile deal that will also come under regulatory scrutiny, and the share price impact has been significant. The Warner Bros share price has trended higher since it said it was looking for a buyer in October 2025, as you can see below. However, the gains have slowed as Warner still refuses to accept Paramount’s better offers. In the past month, its share price is higher by 3%, however, it is lower by 1.6% in the past week.
Netflix made an offer for Warner Bros on 5th December, and in the past month, its share price is down 6%. Paramount has made a higher offer, and its share price has had a more severe sell-off and is lower by 14% in the past month.
So, using the Warner Bros deal as a guide, Glencore’s share price rally could fizzle out if further details are not released soon, and it is also worth watching for any regulatory pushback in the coming days. However, as you can see in chart 2 below, deal speculation can have a big long-term impact on share prices.
Chart 1: Rio Tinto and Glencore share price, normalized to show how they move together
Chart 2: Warner Bros, Netflix and Paramount share price, normalized to show how they move together
