Rio Tinto eyeing bid for Canada's Alcan: report

Rio Tinto Ltd./Plc has hired Deutsche Bank to advise it on a possible bid for Canadian aluminum producer Alcan Inc., the Sydney Morning Herald newspaper reported on Monday.Rio Tinto is the latest mining house reportedly sizing Alcan up for takeover after Alcan rejected a $28.4 billion bid by Alcoa. An Alcan-Rio link up would create the world's largest aluminum company.

Rio was unlikely to retain Alcan's downstream aluminum rolling and packaging arms, which it could sell for more than $8 billion and take some of the sting out of having to fork out possibly over $30 billion for Alcan, analysts said.  "With debt capacity of $15 or $20 billion, Rio's got the firepower to make a bid," said Shaw Stockbroking analyst John Colnan.

It could get cheaper than it looks if Rio was to come in with a partner who would take the downstream and leave Rio with the mines and smelters," Colnan said. Neither Rio or Deutsche Bank would comment on the Sydney Morning Herald report. Alcan was last trading at around 16 times earnings. Australia's Macquarie Bank sees Rio's 2007 profit at around $7.4 billion, giving it a trading multiple of around 12 times earnings, compared with BHP at 11 times and Xstrata at 8.6 times.

Rio has been notably absent in the latest round of industry consolidation. Its last big acquisition was in 2000, when it purchased North Ltd., making it the world's second-largest miner of iron ore.  In Australia, Alcan and Rio are equal 40-40 partners in the world's biggest alumina refinery -- Queensland Alumina -- with Russia's United Company Rusal holding the other 20 percent.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.