Can the second Rio-Glencore swop succeed where others faltered? Lessons from the Warner Bros bidding war

The commodities sector is abuzz with fresh takeover speculation as Rio Tinto returns with another attempt to combine operations with Glencore, including consideration of Glencore’s coal assets. History suggests caution is warranted—two years ago a similar pursuit collapsed amid pricing disputes. Yet today’s environment looks markedly different.

Why this M&A moment feels different than before

The backdrop has shifted significantly. Copper prices have climbed to unprecedented levels, fundamentally altering the economics of any potential swop or merger. This resurgent commodity cycle has made Glencore a more attractive target, prompting Rio to return to negotiations after the previous bid stalled. The earlier attempt foundered on valuation gaps between bidder and target, but the companies are now willing to discuss terms again. Whether Rio and Glencore can bridge their differences hinges on whether recent price movements have aligned their expectations.

How the Warner Bros saga illuminates deal outcomes

Before analyzing Rio and Glencore’s prospects, it’s instructive to examine a parallel high-stakes negotiation: the ongoing tussle for Warner Bros Group among Netflix, Paramount, and Skydance. This prolonged battle reveals several patterns worth considering.

Warner Bros initiated a sale process in October 2025, triggering an extended period of competing bids and counter-offers. Netflix tabled an offer on December 5th, followed by Paramount increasing its own bid. Yet Warner Bros management has consistently rebuffed the higher offer, preferring Netflix’s terms. The market has reacted in real time: Warner Bros shares have drifted lower in recent weeks despite earlier enthusiasm, Netflix shares have declined 6% over the past month, while Paramount—making the aggressive play—has suffered a sharper 14% pullback.

The takeaway? Drawn-out negotiations, regulatory uncertainty, and changing circumstances can rapidly erode the initial optimism around any transformative deal.

What Rio-Glencore investors should expect

Applying this framework to the current swop proposal:

The initial market response has been predictable. Rio’s shares are down 2.5% as investors digest the potential capital commitment and integration risks. Glencore, as the acquisition target, has surged over 10% on hopes of a premium-priced exit. This divergence mirrors the Warner Bros pattern exactly.

Three variables will determine whether momentum persists. First, execution risk: if negotiations stall without tangible progress on deal terms, Glencore’s share price rally could flatten or reverse, potentially lifting Rio’s depressed valuation. Second, regulatory obstacles could prove fatal—antitrust authorities may force significant divestitures or block the deal entirely, triggering repricing across both stocks. Third, price escalation: Glencore shareholders will likely push Rio to sweeten its initial proposal, and each price increment can further support Glencore’s stock.

The structural differences matter

Unlike the Warner Bros situation, where cultural and strategic fit remain contested, the Rio-Glencore swop is rooted in fundamental industrial logic—complementary mining operations and overlapping commodity exposure. This operational rationale could smooth a path that purely financial acquisitions sometimes struggle with. However, the sheer scale and complexity—potentially encompassing coal operations alongside core mining—introduces its own regulatory minefield.

Reading the market signals ahead

Chart analysis of both situations reveals a consistent pattern: initial optimism peaks when news breaks, but subsequent performance depends heavily on deal momentum and external developments. Warner Bros shares initially rallied on the sale announcement but have since consolidated, with volatility spiking around each new bid or rejection.

For Rio-Glencore watchers, the critical periods will be announcement of specific terms, regulatory filings, and any indication that talks are accelerating or stalling. Glencore’s share price premium relative to Rio’s discount is currently pricing in roughly a 50-60% probability of deal completion at some price, but that consensus could shift sharply if regulatory headwinds emerge.

The copper market strength that reignited Rio’s interest provides a favorable backdrop, but commodity cycles are cyclical. The longer negotiations persist, the greater the risk that falling copper prices undermine the deal’s attractiveness, much as Warner Bros’ valuation uncertainty has weighed on all three bidders in recent weeks.