A Rio Tinto Takeover?

Leaving little time to digest after swallowing Canadian aluminum company Alcan, Rio Tinto, the world's third-largest miner, is now itself rumored to be a target of pursuit by two other giant mining firms, BHP Billiton and Brazil's Companhia Vale do Rio Doce. Rio Tinto (nyse: RTP - news - people ) surged 3.08 Australian dollars ($2.54), or 3.2%, to 98.78 Australian dollars ($81.36) in midafternoon trading Thursday in Sydney. Investors bought on unconfirmed news that the world's biggest mining company, BHP (nyse: BHP - news - people ), and CVRD (nyse: RIO - news - people ) are joining hands for a bid to take over Rio Tinto and break up its assets subsequently. Both BHP Billiton and CVRD declined Thursday to comment on market speculation. The news came after the Canadian Competition Bureau gave a green light last Friday to Rio Tinto's acquisition of Alcan (nyse: AL - news - people ). The takeover, if it gets the nod from Rio Tinto's shareholders next week, will make the London-based miner the world's biggest producer of aluminum and bauxite, moving ahead of Alcoa (nyse: AA - news - people ) in the United States and Russia's Rusal. Rio Tinto offered to buy Alcan in July at $101 per share, valuing the company at $38.1 billion. Rio Tinto last week raised $40 billion to complete the Alcan deal. (See " Rio Tinto Slimming Down To Win Alcan") BHP Billiton is the world's largest diversified mining corporation, extracting aluminum, coal, copper, manganese, iron ore, uranium, nickel and silver in more than 100 projects across 25 countries. CVRD, besides owning the largest nickel reserves on the planet, is a world leader in iron ore and pellets production. CVRD has mining operations in 13 Brazilian states and 32 countries.