Rio Tinto has decided not to make a firm offer for Glencore after merger talks. Rio’s Australian-listed shares remain unchanged, while Glencore shares closed 7% lower in London. The companies were too far apart to pursue an extension under UK takeover laws. Rio wanted control without paying a high enough premium.

Fair value estimates of AUD 125 for Rio and GBX 480 for Glencore are maintained. Rio shares trade 26% above intrinsic value, while Glencore is fairly valued. Talks were driven by Rio’s desire to expand copper exposure due to rising demand from renewables, electric vehicles, data centers, and electricity grids.

Glencore tried to play on the bullish narrative of the copper market, but Rio ultimately did not agree to a deal. The proposed transaction details remain confidential, but an all-share merger could have been minimally dilutive for Rio. Given the bullish sentiment in the copper space, it may be a better time to sell copper mines rather than buy them.

Read more at Morningstar: Rio Tinto and Glencore Go Their Separate Ways