Xstrata's proposed $40 billion merger
with Anglo American may spur competing bids from Vale and China as
rival miners compete for a deal to place them among the largest,
according to Bloomberg sources.
Analysts and investors reported Brazil’s Vale, the world's biggest iron ore producer and government-owned Aluminum Corp. of China may also consider acquisitions.
Xstrata said June 24 a merger of equals would save more the new company $1 billion annually by the third year after the deal. The plans to make the savings included combining adjacent mining operations in South America, South Africa and Australia. The offer was rejected by Anglo shortly after it was proposed, saying it was “totally unacceptable.”
Xstrata and Anglo are the last remaining mining groups that, through one acquisition, would allow a company to compete with mining giants BHP, Rio and Vale.
