Alcoa Withdraws Alcan Offer After Rio Tinto Bid

U.S. aluminum giant Alcoa abruptly called off its two-month-old hostile effort to acquire Alcan, giving up on hopes of forming the world’s largest aluminum producer and likely setting itself up as a takeover target. The move comes in the wake of Rio Tinto’s friendly - and much larger - offer for Alcan. Rio Tinto announced an agreement with Alcan’s board early yesterday to buy the Canadian company for $38.1 billion, 36% above Alcoa’s $27.94 billion bid and marking the biggest takeover deal yet in the consolidating global mining industry. “At this price level,we have more attractive options for delivering value to shareholders,” Alcoa Chief Executive Alain Belda said in a prepared statement issued after yesterday’s close. He cited several, such as “targeted growth investments,” divestitures and share buybacks, that indicate he’s planning for Alcoa to remain an independent company. Still, Belda also noted that the large price Alcan is fetching “strongly reinforces our view of the underlying value in the aluminum industry.”