Australian
iron ore giant
Rio Tinto has poured cold water on speculation in the media regarding the possibility of a merger between the company and international commodities producer and trader
Glencore.
Referring to the discussions between the two companies in July this year regarding a potential merger, the
Rio Tinto board stated that, after consultation with its financial and legal advisers, they concluded unanimously that a merger was not in the best interests of
Rio Tinto's shareholders. The board's rejection was communicated to
Glencore in early August and there has been no further contact between the companies on this matter.
Rio Tinto chairman Jan du Plessis commented, "The board believes that the continued successful execution of
Rio Tinto's strategy will allow
Rio Tinto to increase free cash flow significantly in the near term and materially increase returns to shareholders.
Rio Tinto's shareholders stand to benefit from the very considerable value that this will generate."