Canadian mining group Inco has announced that it has put in a bid of cash and Inco common shares for rival Falconbridge.

The Inco offer for the acquisition of all the outstanding common shares of Falconbridge is worth approximately Cdn$34 per Falconbridge share and has been approved by the respective boards of directors.

Toronto-based Inco claims that, if accepted, the friendly takeover bid would create a leading Canadian-based nickel and copper "powerhouse", with "aggressive plans for low-cost, profitable, long-term growth".

The new combined organisation will be called Inco Limited and would be posited as a world leader in nickel and copper, as well as potentially incorporating the pgm operations at Falconbridge. The Inco deal tops a bid for Falconbridge from Swiss-based Xstrata.

Scott M Hand, chairman and CEO of Inco, commented: "Given the excellent growth prospects for both nickel and copper, driven in large part by continuing strong demand from China, the combined company will be positioned to generate very strong cash flow and earnings both in the near and long term, and will have the size and financial strength to take advantage of new growth opportunities as they emerge."

Inco and Falconbridge have also entered into a support agreement covering the offer, up to a cash maximum of Cdn$2.87 billion. The combined company forecasts synergies and cost savings totalling US$350 million per year by the end of 2007.



Ÿ Adfero Ltd