Wall Street clamors to offer advice on Rio-Glencore and the $100 million prize

Wall Street advisors could earn more than $100,000,000 in fees if Rio Tinto acquires Glencore and creates the world's biggest mining company, worth more than 200 billion dollars.

Three people familiar with the matter said that after Rio and Glencore announced on Thursday their intention to merge, they were now racing for a piece of the pie.

Rio's representative, who has until the 5th of February to submit a formal bid for Glencore, or to walk away, under British takeover regulations, stated that it would disclose its advisers once a deal is finalized. Glencore declined comment.

Banking advisers are often retained by companies to help them with negotiations, business plans and liaising between investors and other stakeholders.

The fees for merger and purchase advice can vary depending on how complex the deal is and if the advisers are providing funding.

Two people familiar with such transactions and LSEG's data on fees for top M&A deal showed that a?deal the size of Rio Glencore could generate fees of up to $100 million.

Sources at competing advisory firms said that the companies had not yet announced their advisers. Some roles were still being finalized. The announcements of the two companies confirming their talks did not include any advisers.

JPMorgan is the "corporate broker" for Rio. It advises the world's largest iron ore mining company. UBS is Rio's broker, while Glencore doesn't have an official broker.

In Britain, publicly traded companies hire corporate brokers who help them to negotiate with investors. They are also the ones they go to for advice about dealmaking.

Two people familiar with the matter have confirmed that Citi has remained in touch with Glencore, having advised them on past deals, including their failed acquisition of Teck by 2023.

JPMorgan, Citi, and UBS all declined to comment.

M&A DEALMAKING IS TICKING UP

Dealogic data indicates that Goldman Sachs and JPMorgan led the global M&A rankings in terms of fees last year, which grew 19% compared to 2024. This was due to strong deal activity across North America.

As corporate M&A increases, the stakes are higher for advisors who miss out.

LSEG data show that in 2025 there will be 68 deals worth $10 billion or higher, which total $1.5 trillion, more than twice the amount of the previous year. The looser U.S. regulations are encouraging big companies to make deals.

A drop in interest rates during the last year has also made it easier for deals to be financed.

The conditions for large deals will not improve, according to a banker who advises on cross-border transactions and isn't involved in the Rio Glencore negotiations. He added that potential bidders have begun to feel more comfortable about tariffs.

Rio's talks with Glencore may not be successful. If a deal does not materialize, advisory banks could only receive a few hundred thousands dollars in fees.

Both companies have previously discussed merging their operations. In 2014, Rio de Janeiro rejected a Glencore offer, claiming it wasn't in its shareholders' best interest.

The merger talks that took place in 2024 ended similarly. (Reporting from Andres Gónazalez, Amy Jo Crowley and Anousha Saoui in London. Clara Denina contributed additional reporting from London. (Editing by Elisa Martuzzi and Alexander Smith).

(source: Reuters)