The Alcan-France connection

Canadian aluminum maker Alcan Inc. is another step closer to moving into foreign hands after France approved Rio Tinto’s takeover. But plans for a new smelter continue to be up in the air – something that began when Alcan bought out a French rival. Alcan bought French aluminum producer Pechiney SA in 2003, which halted negotiations for a smelter project in Coega, South Africa. Alcan had said it wanted to start building the smelter sometime in the middle of 2008, but takeover talks and approval of the deal continues to cast doubt over the project. Rio got the go-ahead from anti-competition regulators in Australia and the European Commission on Wednesday. Competition regulators in Canada and the U.S. have also approved the US$101 per share deal, but foreign investment clearances are still needed. In mid-September, Rio extended the US$38-billion offer for the aluminium producer to Oct. 23 in order to gain these approvals. Rio Tinto shareholders approved the deal on Sept. 28.