Glencore-Rio: “Wrong Deal at the Right Time” says Russell

In an article for Reuters, Clyde Russell suggested that the proposal recently announced by Glencore (LSE:GLEN) to merge with Rio Tinto (NYSE:RIO) could have some difficulties.

As quoted in the publication:

Glencore’s proposal to create a $160 billion behemoth is certainly audacious, and may even make sense for shareholders of both companies if priced attractively.

But even if it were successful, such a deal would do little resolve the key problems bedevilling the outlook for many commodity markets, and the companies that produce those resources.

The Glencore-Rio Tinto merger proposal makes for good headlines and gives day-traders something to focus on, but it may be a case of Macbeth’s “sound and fury, signifying nothing”.

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