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Alcan: bought by Rio Tinto for $38.1 bln

Rio Tinto on Thursday reached agreement on a deal to buy Canadian aluminum producer Alcan for $38.1 billion, topping the hostile offer lodged by Alcoa by roughly a third.

Rio Tinto said it´s offering $101 a share in cash for each share of Alcan which it says is a 65.5% to Alcan´s all-time high prior to the Alcoa offer, and is a premium of 32.8% to Alcoa´s current offer. The board of Alcan, which wouldn´t even release data to Alcoa unanimously backed the offer from the Anglo-Australian mining giant.

The combined aluminum product group, to be named Rio Tinto Alcan, will be a new global leader in the aluminum industry with large, long life, low cost assets worldwide, the companies said. Current Alcan CEO Dick Evans will lead that division from Montreal and report to Rio Tinto CEO Tom Albanese. "The agreed transaction with Rio Tinto is the outcome of a rigorous and thorough process conducted by the Alcan board. It achieves all of our stated goals, providing clearly superior value to Alcan shareholders while remaining true to our core values and obligations as responsible corporate citizens," said Alcan Chairman Yves Fortier in a statement.

"In addition to a very attractive all cash premium, this transaction offers Alcan shareholders the certainty of a clear path to completion given our relatively limited operational overlap and a commitment by both parties to an expeditious close," he added. Rio Tinto said that Alcan has a high quality upstream asset portfolio with a sustainable low cost position through its excellent access to long life hydro power. Rio Tinto agreed with the government of Quebec to keep its head office in the province in return for water and power rights that the government had previously granted to Alcan. The company said it´s going to sell Alcan´s packaging business. (petrolplaza.com)