Rio Tinto Offers To Buy Turquoise Hill Resources For $2.7B: Bloomberg

Rio Tinto plc RIO proposed to buy out Turquoise Hill Resources Ltd TRQ for $2.7 billion, aiming to gain more control of a giant copper mine it’s developing in Mongolia, reported Bloomberg.
Rio wants to expand its exposure to so-called future-facing commodities. This transaction could ease many problems at the flagship Oyu Tolgoi growth project. Rio has faced spiraling costs and long-running disputes with both the Mongolian government and Turquoise Hill.
Recently, Rio struck a deal with the government to start work on a long-delayed $6.9 billion underground expansion of Oyu Tolgoi after agreeing to write off $2.4 billion owed by the state. Rio is offering C$34 ($26.60) a share to Turquoise Hill’s minority shareholders, a 32% premium to Friday’s closing price.
Rio owns 51% of Turquoise Hill, which holds a two-thirds share in Oyu Tolgoi.
“The proposed transaction would enable Rio Tinto to work directly with the government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure,” commented Rio’s Chief Executive Officer, Jakob Stausholm.
Rio Tinto held $15.2 billion in cash and cash equivalents plus other short-term cash investments as of December 31, 2021.
Price Action: RIO shares are trading lower by 2.60% at $70.83 and TRQ higher by 30.90% at $26.35 during the premarket session on Monday.