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. Last Updated: 07/27/2016

Hostile Bid From Alcoa For Alcan

NEW YORK -- Alcoa is making a hostile bid for Canadian aluminum rival Alcan worth nearly $27 billion after failing in almost two years of private talks to reach a negotiated deal.

Alcoa said the proposed cash-and-stock deal would create a premier diversified global aluminum company that could grow faster than the two companies could on their own.

Alcan's U.S. shares rose nearly 25 percent in premarket trading while Alcoa shares fell nearly 2 percent.

The combined company, with 188,000 employees in 67 countries, would have had revenue last year of $54 billion and earnings before interest, taxes, depreciation and amortization of $9.5 billion.

The combined company's alumina capacity would be about 21.5 million tons, and its aluminum capacity would be approximately 7.8 million tons.

New York-based Alcoa sees annual pretax cost savings of about $1 billion from its proposed combination with Alcan in the third year after the deal closes.

Calls to Montreal-based Alcan representatives were not immediately returned.

The company is offering a combination of cash and stock that it said was worth $73.25 for each Alcan share, a 20 percent premium to Alcan's closing price Friday of $61.03 and a 32 percent premium to Alcan's average closing price over the last 30 trading days.

The bid includes $58.60 per share in cash and 41 percent of an Alcoa share for each share of Alcan.