ALUMINIUM supplier Alcoa has said that it will make an offer to acquire all of the outstanding common shares of its rival Alcan for about US$33bn, including debt. The unsolicited bid follows nearly two years of negotiations between the two companies, which have failed to produce a merger agreement. Alcoa stated that its cash and stock offer of US$73.25 a share would represent a 32% premium to Alcan's average closing price on the New York Stock Exchange (NYSE) over the last 30 trading days and a 20% premium to Alcan's closing price on 4 May 2007, its all-time high. Alcoa believes that the merged company would generate pre-tax cost synergies of about US$1bn annually after three years. Alcoa expects to generate synergies in the areas of smelting and refining, overhead improvements like sales and general administrative expenses, plant costs and procurement.
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