Rio Tinto Takeover Essay

Are Rio Tinto shares about to be subjected to a takeover?

Multinational metals and mining corporations are a dime dozen on the stock market, with it becoming increasingly difficult to separate the wheat from the chaff. Rio Tinto Group was founding in 1873, making it one of the oldest mining companies in existence, as a result of consortium purchase of a mining complex on the Rio Tinto River in Spain. Since taking control of the mine the company has grown in size seemingly year on year, via a wide array if mergers and acquisitions. They now list among the world leaders in aluminium, copper, uranium, coal, diamonds, and iron ore development due to such expansions. However, it wasn’t all plain sailing for Rio Tinto and Rio Tinto shares in 2014. Even with operations on six continents, a potential takeover bid had been on the horizon for a while. In 2014 Glencore made a pitch to purchase the company, so why did Rio Tinto reject the takeover and what does it mean for Rio Tinto shares?

The news saw the price of Rio Tinto shares rise by 9% in a day, yet it seems an approach was all the news was ever going to result in. Rio Tinto publically stated that a takeover was “not in the best interest of its shareholders”. As Rio Tinto happens to be the bigger of the two firms you can argue that they have a point, with Rio Tinto’s market capitalisation being over £11 billion more than