According to Bloomberg, a deal between Swiss commodities trading giant Glencore PLC (LON: GLEN) and Rio Tinto Limited (ASX: RIO), "will happen".
The article names a prominent London-based investment banker and dealmaker, Ian Hannam, and reports he gave a speech to 20 investors in mid-November about the deal.
Bloomberg quoted Mr Hannam as saying: "If not today, this deal will happen sometime in the near future…Glencore is M&A savvy and times deals well. The combination will create a super-major with a diversified portfolio of world-class mining assets."
In early October the board of Rio Tinto made a statement to the ASX which said it: "Confirms that no discussions are taking place with Glencore." However it did confirm it was approached by the trading giant in July regarding potential merger discussions.
Whilst it: "Concluded unanimously that a combination was not in the best interests of Rio Tinto's shareholders." Glencore has time on its hands.
Glencore's CEO Ivan Glasenberg has a proven track record when it comes to ambitious takeovers. He has already successfully steered the company through multiple acquisitions including the $41 billion takeover of Xstrata.
What should investors do?
Currently iron ore miners such as Rio Tinto are coming under intense selling pressure, following a rapid fall in the commodity's spot price throughout 2014. No doubt Glencore would have anticipated the falls. Although it's too early to say for sure, given any takeover offer would be at a premium to the market price; Rio Tinto shareholders can have some confidence that even if the stock drops to a very low price there will be someone interested in buying them.
