What will Ivan buy next?

The paper says that “What Ivan buys next” has been a favourite mining sector parlour game even before the Swiss firm went public in 2011 making Glasenberg, an 8% shareholder, one of the richest people in the world and creating a handful of billionaires and dozens of millionaires.

There is not shortage of possible takeover targets for Glencore, with a market value of $77 billion and an outperforming share price, and the FT trots out the usual suspects.

The cash-flush Baar-based company making a move on diversified peer Anglo American (like Xstrata did six year ago) has long been floated, but Glasenberg pooh-poohed the idea speaking at his old hunting grounds in Johannesburg, South Africa last week.

Glencore would not be interested in mining what it doesn’t trade, that is, Anglo’s platinum and diamond operations, Glasenberg said.

The spin-off company that top miner BHP Billiton is creating out of among others its manganese and nickel assets in South Africa and Colombia, Australian and South African coal mines and the Cannington lead and silver mine in Queensland is also an obvious candidate.

The new company could be worth as much as $15 billion which would be no problem for Glencore, but anti-trust issues in the coal market would probably preclude such a deal and picking up the BHP board’s pieces would not be Glasenberg’s style.

The most intriguing idea put forward by FT is a merger between Glencore and Rio Tinto, which would combine the world’s second and fourth largest miner, and knock BHP off its thrown:

Some bankers say Glencore can think bigger. Rio Tinto, larger than Glencore by market capitalisation, gains almost all its earnings from iron ore, where its operations are generally seen as the best in the business. In contrast, Glencore trades but does not mine the steelmaking commodity.

The lack of meaningful overlap between the companies would make the creation of a “GlenTinto” a powerful alternative to BHP, which is ending its interest in several commodities by spinning off a portfolio of non-core assets.

“If Glencore went for Rio and pulled it off it would be the diversified mining investment of choice,” says Mr Gait. He adds that such a combination will “marry the world’s most important set of mining assets to the most sophisticated commodities trading business . . . it is hard to imagine that there would not be value that would be unlocked through such a combination”.

Rio Tinto shareholders would gain exposure to stronger commodity growth, he says, while managing the combined entity with the same financial gearing that Glencore has today could free up $49bn of cash from the balance sheet to hand to shareholders.

While the idea of a nil-premium merger with Rio has appeal, nothing is imminent, according to bankers. “To persuade Rio shareholders to do a deal with Glencore is a big ask and is only going to happen if they get the fright of their life and the iron ore market turns into a real nightmare,” says one banker.

Sam Walsh, Rio’s chief executive, says the idea of a deal with Glencore is “really a question for Ivan” not him. “I have said we are not looking at doing M&A. Rio is not eyeing anybody.”