Toronto – Alcoa Inc., seeking to keep pace with growing Russian rival Rusal, launched a hostile $27 billion bid for Canadian aluminum rival Alcan Inc. on Monday, after failing in almost two years of private talks to reach a negotiated deal.
Alcan’s U.S. shares rose 34.5 percent, well above the offered price, suggesting investors think the bidding could go higher. Alcoa shares gained 8.3 percent.
Montreal-based Alcan said its board “will consider the proposal” and advised shareholders to await its recommendation.
Alcoa said the proposed cash-and-stock deal would create a premier diversified global aluminum company that could grow faster than the two companies could on their own.
“I know from almost two years of private discussions with Alcan that they also see the strategic logic behind this combination,” said Alain Belda, Alcoa’s chairman and chief executive. “I’m disappointed that we were not able to come to a negotiated transaction, and while I’m taking this offer to shareholders, I hope that this combination can move forward with the support of Alcan’s management and board.”
Alcoa said in announcing the offer that the companies’ talks had reached the board level last fall. The company plans to begin its offer on Tuesday.
The combined company, with 188,000 employees in 67 countries, would have had revenue last year of $54 billion and earnings before interest, taxes, depreciation and amortization of $9.5 billion.
