Aluminum Company of America (Alcoa Inc.) announced Monday that it is going to make a hostile bid for Canadian aluminum rival Alcan Inc. for 33 billion U.S. dollars.

Alcoa Inc. said in its news release that it will make an offer Tuesday to acquire all of the outstanding common shares of Alcan Inc. for 58.60 dollars in cash and 0.4108 dollar of a share of Alcoa common stock for each outstanding common share of Alcan.

The transaction will create a premier diversified global aluminum company, with a complementary portfolio of assets and enhanced growth opportunities, and better position the combined company to build value for shareholders, said Alcoa.

The offer followed almost two years of discussions between the two companies regarding a variety of potential business combination transactions, including unsuccessful board-level discussions of a merger transaction last fall.

Based on Alcoa's closing stock price on May 4, 2007, the offer has a value of 73.25 dollars per Alcan share or approximately 33 billion dollars in enterprise value.

The Alcoa offer represents a 32 percent premium to Alcan's average closing price on the New York Stock Exchange over the last 30 trading days and a 20 percent premium to Alcan's closing price on May 4, 2007, its all-time high.

The transaction is subject to review by antitrust authorities in various jurisdictions including the United States, Canada, the European Union, Australia and Brazil. It also requires foreign investment clearance in Canada, France and Australia.

Alcoa is targeting completion of the transaction by the end of 2007.

Shares of Alcoa rose 2.30 dollars, or 6.5 percent, to 37.96 dollars, while Alcan surged 20.21 dollars, or 33.1 percent, to 81. 24 dollars.

Source: Xinhua