Rio Tinto and Alcan have reached an agreement for Rio Tinto to make an offer to acquire all of Alcan for around $38.1 billion. The offer represents a premium of 65.5 percent to Alcan’s all time high closing share price. The combined aluminum product group, to be named Rio Tinto Alcan, will be a new global leader in the aluminum industry with assets throughout the world. The combined company will have significant bauxite reserves, alumina refining, hydro power and smelter technology.
Rio Tinto Chairman Paul Skinner said: "This transaction combines two leading and complementary aluminum businesses, and is a further step in Rio Tinto’s strategy of creating shareholder value through investing in high quality, large scale, low cost
and long life assets in attractive sectors.
After completing the acquisition, Rio Tinto Alcan will be the largest global producer of aluminum and bauxite, based on current production, with a defined pathway through the commissioning of Gove and the committed expansion of Yarwun to becoming the largest producer of alumina.
The companies' plan is to create a new global aluminum division called Rio Tinto Alcan, which would be based in Montreal and led by Alcan's current chief executive, Dick Evans.