Aluminum Giant Makes Play for Rival

Alcoa's $26.9 hostile takeover bid for Alcan comes after years of merger talks
By J. Kelman,  Newser User
Posted May 7, 2007 1:44 PM CDT
Large rolls of aluminum are cooled before they get cut to order size in a Friday April 7, 2006 photo at the Alcoa Warrick Operations in Newburgh, Ind. The company announced Monday, April 7, 2007, that...   (Associated Press)
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(Newser) – Aluminum titan Alcoa is hoping to get its largest rival, Alcan, to melt under a hostile takeover bid, after merger talks between the two companies collapsed. Alcoa, the world's largest aluminum company, has offered $26.9 billion for its Canadian competitor in an effort to beat out the emerging market producers who have recently dominated the industry.

The deal would offer Alcoa easy access to cheap Canadian hydropower, which it needs to challenge lower-cost rivals. "This is the only way the company will compete against the Russians or the Chinese," says one aluminum industry analyst. But some warn that another producer could try to take over both companies, making the deal anything but a sure bet.