Brazil’s CVRD Buys Canadian Inco and Becomes World’s Second Largest Mining Co

The Brazilian mining company CVRD (Companhia Vale do Rio Doce) announced today, October 24, the purchase of 75.66% of the capital of Canadian mining company Inco.

A total of 174,623,019 common shares were purchased for 86,00 Canadian dollars each, totaling over 15 billion Canadian dollars, or US$ 13.3 billion. This is Brazil’s biggest purchase ever.

With the purchase of Inco, which is specialized in the production of nickel, the Brazilian company has become the second greatest mining company in the world, losing only to the Australian firm BHP Billiton.

CVRD’s market value is about US$ 55 billion now after the acquisition.

CVRD was created in 1942 by Brazilian President Getúlio Vargas and privatized by Fernando Henrique Cardoso in 1997.

The Brazilian company was trying to get Inco for the last three months. Among those also vying for the Canadian firm were the American company Phelps Dodgee and Canadian Teck Cominco.

Inco is a world leader in the production of nickel. Last year, the company earned US$ 4.518 billion with a profit of US$ 836 million.
 
Companhia Vale do Rio Doce will maintain Toronto as its headquarters for the nickel business. The company has a presence in five continents: the Americas, Europe, Oceania, Asia and Africa.

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