Rio Tinto CEO Simon Trott is focused on cost cuts, asset sales and copper growth as investors remain wary of reviving a tie-up with coal-heavy Glencore.
A six-month standstill preventing Rio Tinto from approaching Glencore for a takeover expired on Monday, but people familiar with the matter do not expect talks to restart as Rio Tinto CEO Simon Trott sticks to a simplification plan centered on cost cuts, divestments and its most profitable assets. Trott reviewed a roughly $200 billion merger concept months after taking the top job but concluded there was no value case, leading Rio Tinto to walk away on February 5. Investors cited in the report said Australian shareholders oppose revisiting the idea, in part because Glencore is a major coal exporter and because a renewed approach could hurt Rio Tinto's share price from a corporate governance perspective. Glencore has strengthened its hand in market terms, with its shares up 33% this year versus an 18% rise in Rio Tinto's UK-listed stock, but analysts said that higher valuation also makes a deal less attractive for Rio because of dilution. Trott's immediate test is to unlock more than $10 billion through divestments, with half targeted within the year, while expanding trading and seeking copper opportunities. Analysts say Rio's failed approach underscored a longer-term strategic issue: limited copper growth options beyond 2030 that may be difficult to solve without M&A. Glencore, meanwhile, is highlighting its copper assets and stepping up outreach to Australian institutional investors after underestimating resistance there to a possible merger, while also keeping options such as a Sydney listing or other partnerships under consideration.