Alcan reportedly looks to Rio Tinto as white knight

Canadian aluminium producer Alcan is reported to be talking to Anglo-Australian mining company Rio Tinto about a merger in order to fend off a hostile takeover bid by US rival Alcoa. Newspapers, quoting sources close to Alcan, said Rio Tinto would offer 24.7 billion euros, bettering Alcoa’s 20.3 billion euro bid. Alcan this week told US regulators that it has “undertaken negotiations” on alternatives to the Alcoa offer.

Rio Tinto gets only about 16% of its revenues from aluminium. Russian firm Rusal is the world’s largest producer turning out four million tons last year. Alcoa is just slightly bigger than Alcan and the fourth largest is Norway’s Norsk Hydro. Alcoa launched its offer on the 7 May as inadequate, and the Canadians have repeatedly rejected it and has declined to enter talks. They said that was partly because Alcoa refused to sign a confidentiality and standstill agreement during friendly merger talks that collapsed last year.

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