Sign in Subscribe
Mining industry

CVRD Confident in Acquisition of Inco Limited Despite Counter Offer

Strategic Insights

— 1 min read

Brazil's top mining corporation CVRD, the largest iron ore producer in the world, expressed confidence in its acquisition of Canada's Inco Limited, despite a counter offer from U.S. company Phelps Dodge. CVRD launched its all-cash bid of 19.3 billion Canadian dollars for Inco, which was rejected by the nickel giant in favor of the Phelps Dodge proposal. CVRD maintains that its offer of 87 Canadian dollars per share is superior to the Phelps Dodge offer of 85.76 Canadian dollars per share. The acquisition has significant implications for the global mining industry, with CVRD seeking to expand its operations in the nickel market.

Key Takeaways:

  • CVRD, the largest iron ore producer in the world, made an all-cash bid of 19.3 billion Canadian dollars for Inco Limited.
  • Inco rejected CVRD's offer and advised shareholders to accept the friendly proposal made by U.S. company Phelps Dodge.
  • CVRD stated that its offer of 87 Canadian dollars per share is superior to the Phelps Dodge offer of 85.76 Canadian dollars per share.
  • The acquisition has significant implications for the global mining industry, with CVRD seeking to expand its operations in the nickel market.
  • CVRD has maintained that its acquisition of Inco is a strategic move to increase its market share in the nickel industry.
  • Phelps Dodge's counter offer of 77.43 U.S. dollars per share for each share of Inco was rejected by CVRD.
  • The acquisition bid was made by CVRD's managing council, who believe that the company's all-cash offer is a better option for Inco shareholders.

Statistics:

  • CVRD's all-cash bid for Inco Limited amounts to 19.3 billion Canadian dollars (17.4 billion U.S. dollars).
  • CVRD offered 87 Canadian dollars (78.55 U.S. dollars) in cash for each share of Inco Limited.
  • Phelps Dodge's counter offer of 85.76 Canadian dollars (77.43 U.S. dollars) per share for each share of Inco Limited was rejected by CVRD.
  • CVRD made its first proposal to acquire Inco on August 11.
  • CVRD's acquisition bid is subject to approval by Inco shareholders.

Sources:

  • Xinhua via COMTEX, August 29, 2006.

Read more