Glencore Swoops In on Deal for Rio Tinto's Australian Coal Mines -- 2nd Update
09 Junho 2017 - 6:21PM
Dow Jones News
By Razak Musah Baba and Michael Amon
LONDON -- Glencore PLC on Friday offered over $2.5 billion to
buy a major piece of Rio Tinto PLC's Australian coal business,
swooping in to disrupt an agreed-upon deal to sell the assets to a
Chinese company.
The offer demonstrates the renewed appetite for deal-making by
Glencore Chief Executive Ivan Glasenberg almost two years after the
Switzerland-based commodity giant experienced a downward spiral in
share price. Since the company's stock recovered, Mr. Glasenberg
has engineered the purchase of a stake in Russian state oil company
PAO Rosneft, taken full control of a Congolese mine and made a
nearly $10 billion offer to take over agricultural trader Bunge
Ltd.
In Australia, Mr. Glasenberg is targeting Rio Tinto coal assets
that the company has long coveted. And he is inserting himself into
a deal already thought sealed by Rio Tinto, the British-Australian
company Mr. Glasenberg launched talks to buy in 2014.
Glencore said Friday its offer was $100 million richer than the
amount Rio Tinto agreed on in January with Yancoal Australia Ltd.
for Coal & Allied Industries Ltd. Coal & Allied has
significant operations in Australia's Hunter Valley, where Glencore
also has a big coal business, offering the potential for two of the
world's largest mining companies to marry operations and save
money.
Glencore said its offer was already fully financed and could be
considered by Rio Tinto under the terms of its deal with Yancoal,
which hadn't obtained financing at the time the Rio deal was
announced. Glencore's offer expires on June 26, a day before Rio
Tinto has scheduled an extraordinary general meeting to vote on the
deal with Yancoal.
Rio Tinto said Friday that it had received Glencore's proposal
and would respond after giving it "appropriate consideration."
Yancoal couldn't be reached.
The interest in Rio Tinto's coal assets comes amid a volatile
period for the commodity, in this case, thermal coal, which is used
to generate electricity.
Its price shot up in 2016 as demand from China heated up. The
market has cooled this year, and analysts expect thermal-coal
prices to remain subdued as countries switch to cleaner-burning
fuels.
In all, the operations that Glencore wants to buy account for
about 60% of Rio Tinto's coal production. The sale would rid Rio of
nearly all of its thermal coal, though it still produces
significant amounts of metallurgical coal, an ingredient in
steel.
Glencore emphasized on Friday that it was conscious of the
strain this deal could put on debt levels that Mr. Glasenberg
scrambled to lower over the past two years.
If successful in buying Coal & Allied from Rio Tinto,
Glencore said it would explore selling up to a 50% stake in the
business and look to sell other coal assets so that its total
financial commitment wouldn't exceed $1.5 billion.
If Rio accepts the offer, Glencore said it would also buy out
Japanese trader Mitsubishi's interest in Australian joint ventures
for $920 million.
Much of Coal & Allied's production goes to Japan, giving
Glencore less exposure to Chinese demand fluctuations. Glencore
said it had been given the green light by Japanese antitrust
authorities.
Write to Razak Musah Baba at Razak.Baba@wsj.com and Michael Amon
at michael.amon@wsj.com
(END) Dow Jones Newswires
June 09, 2017 17:06 ET (21:06 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Glencore (PK) (USOTC:GLNCY)
Gráfico Histórico do Ativo
De Set 2024 até Out 2024
Glencore (PK) (USOTC:GLNCY)
Gráfico Histórico do Ativo
De Out 2023 até Out 2024