World's largest iron ore producer CVRD offers to buy nickel giant Inco

Brazil's CVRD, the world's largest iron ore producer, announced on Friday an offer of nearly 18 billion U.S. dollars to acquire Canada's Inco Ltd., global leader in the nickel market.

CVRD will formally present the bid on Aug. 14, and Inco will have 45 days to make a decision. It would be the biggest acquisition ever made by a Brazilian company if the two giants could clinch a deal.

Two other companies, U.S. Phelps Dodge and Canada's Teck Cominco, are competing with CVRD to acquire Inco, but local analysts say CVRD's offer is the best.

CVRD President Roger Agnelli said Friday that his company's offer was a fair price, considering the fact that they are aiming for a 100-percent ownership of Inco and pay in cash.

A statement by CVRD also said the merger would create the third biggest diversified mining company in the world and a leader in the market of iron ore, nickel, aluminum, manganese and bauxite.

It called the acquisition an exceptional opportunity for CVRD, as the activities of the two companies are complementary.

Though widely known throughout the world, CVRD has always had its activities centered in Brazil, even after the privatization process in 2002. If the company succeeds in buying Inco, it could make a huge step to become a global corporation, said Agnelli.

Source: Xinhua