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Rio Tinto moves to buy Alcan


Rio Tinto moves to buy Alcan


Anglo-Australian group Rio Tinto has launched a friendly takeover bid for Canadian aluminium producer Alcan, bettering a hostile offer from the US firm Alcoa. Rio Tinto, which is listed on both the London and Australian stock exchanges, is prepared to pay 27.6 billion euros.

If the deal is completed it would make the combined firm the world’s top aluminium producer, with output of 4.4 million tons last year, ahead of Russia’s Rusal – its figures include its partners SUAL and Glencore. Alcoa is the third biggest, followed by Norway’s Norsk Hydro.

BHP Billiton, which is the world’s largest miner overall, was also reportedly in the mix and prepared to make an all-cash offer, as was Brazil’s CVRD, but Alcan thought that Rio Tinto’s was the best deal and so it is unanimously recommending acceptance of the offer. Analysts said there could still be counter-bids from Alcoa or even Swiss based Xstrata.

Rio Tinto’s shares dropped, but others in the sector rose on anticipation of further mergers in the industry. The consolidation is being driven by record prices for metals, a situation that is generating a lot of cash for mining companies. Demand for aluminium is strong and expected to grow.

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