Jan 30 (Reuters) - Rio Tinto’s (RIO.AX) (RIO.L) shares surged on Wednesday on market talk that an improved offer had prompted the firm to open its books to suitor BHP Billiton (BHP.AX) BLT.L and media reports which said Rio had signalled a price at which it would sell out.
Rio, which has spurned an earlier offer from BHP, said it had nothing to report in response to rumours that it had opened its books on the basis of a sweetened offer.
A merger between the two companies would create the world’s largest producer of aluminium and copper.
The potential combination would give total primary aluminium output of around 5.5 million tonnes based on last year’s estimates. This compares with nearest rival and current top producer United Company RUSAL, which produced an actual 4.2 million tonnes of the metal in 2007.
The merged company would also surpass Chile’s state-owned Codelco to gain top spot in copper mining. In 2006, Codelco mined 1.832 million tonnes of the metal. A combined BHP Billiton/Rio Tinto would have produced just over 2.0 million tonnes, according to industry consultants CRU Analysis.
Following are details of earlier merger moves.
Jan 21 - Brazilian mining giant Vale said it was in talks to buy Swiss-based diversified miner Xstrata in a deal analysts said could top $100 billion.
Vale VALE5.SA (RIO.N), the world’s largest iron ore producer, said market conditions would determine whether it launched its takeover bid, the biggest by a Brazilian firm.
A deal would make it the world’s top nickel producer with around one-fifth of total mined and refined output. It would also reinforce Xstrata’s position as the world’s fourth largest copper miner.
Jan 17 - Anglo American Plc (AAL.L) says it is in talks to buy control of two Brazilian iron ore projects owned by MMX Mineracao (MMXM3.SA)(XMM.TO) for around $5.5 billion to boost exposure to a commodity with buoyant prospects.
Dec 21 - Russia’s United Company RUSAL will buy a strategic stake in Norilsk Nickel (GMKN.MM) from Mikhail Prokhorov’s Onexim Group as it seeks to build a globally competitive Russian metals and mining major. On Tuesday, one of RUSAL’s shareholders told Vedomosti business daily the company was discussing a full buyout or a merger.
Dec 21 - BHP Billiton will have to decide by Feb. 6 whether to make a formal bid for rival Rio Tinto or walk away under UK regulatory rules. BHP announced its plan on Nov. 8 to take over third-ranked Rio and forge a mega-mining group with a market capitalisation of around $350 billion.
Dec 17 - Australia’s Zinifex Ltd ZFX.AX, the world No.3 zinc producer, offers up to A$775 million in cash for nickel miner Allegiance Mining (AGM.AX), the latest move in a hectic round of consolidation among Australian miners.
Dec 7 - China’s state-owned Sinosteel makes a $1 billion cash takeover proposal for Australian iron ore miner Midwest Corp MIS.AX, way above a rival all-share offer from Murchison Metals Ltd MMX.AX, as Chinese companies push overseas to secure resource assets.
Dec 5 - Xstrata makes a A$960 million cash bid for coal miner Resource Pacific, trumping an all-share offer by New Hope Corp, as it seeks to grow in Australia’s booming resource sector.
Dec 4 - Palmary Enterprises Ltd looks set to win a battle for Australian manganese miner Consolidated Minerals Ltd CSM.AX after raising its offer to $1 billion and securing rival bidder Pallinghurst’s stake.
Oct 29 - Xstrata said it offered A$3.1 billion for Australia’s Jubilee Mines NL JBM.AX. Potential counter-suitors are thought to include BHP, Vale and Norilsk Nickel. Norilsk outbid Xstrata earlier for Australian nickel miner LionOre. July 12 - Rio Tinto said it agreed to pay $38.1 billion for Canadian aluminium company Alcan. By Oct 25, 79.4 percent of Alcan’s shares had been tendered to Rio, which extended its bid to Nov. 8 to buy the remaining Alcan shares. The acquisition makes Rio the world’s largest aluminium producer.
June 25 - Germany’s Norddeutsche Affinerie (NAFG.DE) offered 777 million euros to buy Belgian rival Cumerio CUMR.BR. The combination would create the world’s third-biggest copper refiner and Europe’s largest producer. The European Commission is expected to decide by Feb. 5 whether to clear the deal.
June 19 - Norilsk Nickel said it would complete the acquisition of LionOre Mining International Ltd LIM.TO by end-June, when Xstrata’s rival offer expired. By mid-August, Norilsk said it had over 97.7 percent of LionOre shares, reinforcing Norilsk’s position as the world’s top nickel producer.
May 8 - Alcoa said it would make a hostile bid for Canada’s Alcan Inc for nearly $27 billion after talks between the two aluminium producers failed to lead to a deal. Alcoa dropped the bid after Rio Tinto said it agreed to buy Alcan.
Dec 12 - Australia’s Zinifex Ltd ZFX.AX and Belgian metals firm Umicore ACUMt.BR agree to combine their zinc smelters to create the world’s largest zinc metal producer. The two will offer shares in the newly formed Nyrstar, worth up to $1.6 billion, on Euronext some time after the third quarter of 2007.
Nov 20 - Freeport McMoran Copper & Gold Inc (FCX.N) agrees to buy much larger Phelps Dodge Corp (PD.N) for $25.9 billion to create the world’s largest publicly traded copper company, ranked second only to Chile’s state-owned Codelco.
The table below details the top producers of aluminium in 2007:
UC RUSAL 4.200
BHP Billiton 1.340
The table below details the top producers of mined copper in 2006:
BHP Billiton 1.229
Rio Tinto 827
(Freeport figures include Phelps Dodge, Xstrata figures include Falconbridge to give an idea of current likely ranking.)
Sources: CRU Analysis, Brook Hunt, Reuters Metal Production Database.
(Compiled by Karen Norton, Editing by Michael Roddy)