Mining Journal > Finance > Vale doesn’t plan to buy Anglo

Finance

Vale SA, the world’s largest iron- ore exporter, isn’t planning acquisitions, Chief Executive Officer Roger Agnelli said, amid speculation that the company could be considering a bid for Anglo American plc.

Any takeover talk is “market speculation,” Agnelli told reporters today in Rio de Janeiro. “Vale’s keeping quiet; there’s no type of movement,” he said.

Vale may rival a proposal by Xstrata plc to create a “merger of equals” with London-based Anglo American, Citigroup Inc. analyst Alexander Hacking wrote June 22. Anglo American’s board rejected Xstrata’s merger proposal that day, saying the deal would be “unattractive” for shareholders.

Rio de Janeiro-based Vale abandoned a bid for Zug, Switzerland-based Xstrata in March 2008 after failing to agree on terms with Glencore International AG, the company’s largest shareholder. Vale in July 2008 raised BR18.4 billion (US$9.4 billion) in Brazil’s biggest share sale.

Vale has a “very large cash position and significant access to capital, giving it some flexibility to make an offer,” Barclays credit analyst Christopher Buck also wrote in a June 22 note to clients. Still, Vale bonds would have a “significant sell-off” should the company bid for Xstrata or Anglo American, Barclays said today.

Anglo may be seeking a partner to invest in its US$3.6 billion Minas-Rio Tinto iron-ore project in Brazil to bolster funding, people familiar with the plan told Bloomberg News yesterday.
Anglo may sell as much as 30% of Minas-Rio, which it acquired in 2008 from MMX Mineracao e Metalicos SA, these people said.

Vale rose 57 centavos, or 1.9%, to BR30.05 reais at 2:36 p.m. in Sao Paulo trading. The stock has climbed 26% this year, less than the 35% gain by Brazil’s benchmark Bovespa index.

June 25 (Bloomberg)