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NEW YORK - Alcoa said yesterday it would make a hostile bid for Canada's Alcan of nearly US$27 billion ($36.5 billion), after talks between the two aluminium producers failed to lead to a deal.
If successful, the bid would create the world's largest producer of the metal, which is used in products ranging from beer cans to planes.
The value of the bid in cash and Alcoa stock rose to US$74.47 per Alcan share during the day from an initial US$73.25 as Alcoa's shares gained 8.3 per cent. But expectations that a higher bid may surface drove Alcan's shares well beyond the price and they ended up 34.5 per cent at US$82.11.
"The starting gun has just gone off," said John Ing, analyst and president of Maison Placements. "As for possible suitors, it's pretty well anybody nowadays. Nobody is immune from takeover ... There's so much liquidity around, that there are a lot of companies that would be interested."
Most big metals and mining companies have been seen as possible buyers for Alcan, industry sources said. That list would include Anglo-Australian majors Rio Tinto and BHP Billiton, Anglo American, Brazil's CVRD, Norway's Norsk Hydro and Russia's United Company Rusal.
Alcoa chief executive Alain Belda said the planned link-up would better position the company to compete with fast-growing competitors. That group includes players such as Russia's Rusal and China's Chalco, which saw its value nearly triple with its listing in Shanghai last week.
"Emerging global players in Russia, China, India and the Middle East are quickly expanding and adding capacity on a global basis," Belda said.
Montreal-based Alcan, which was split off from Alcoa in the 1920s because of antitrust concerns, said it planned to consider the proposal and advised shareholders to wait until it had fully reviewed the offer.
Given the size of the two North American companies, a deal is expected to draw scrutiny from regulators. Alcoa said it was ready to sell assets to win approval.
- REUTERS
