Alcan submits formal bid for Pechiney

Alcan (al-t) has submitted its 3.4-billion-euro bid for French rival Pechiney to the European Commission. The Montreal-based aluminum giant had launched its hostile bid in early July but held off formal notification for undisclosed “legal reasons.”

The company also submitted commitments to European markets for aluminum flat-rolled products, aerosol units and cartridges.

The European Commission is expected to announce its decision on Sept. 29, though approval is far from certain. More than three years ago, the commission quashed Alcan’s plan to merge with Pechiney and Switzerland-based Alusuisse Lonza (Algroup). Pechiney dropped out of that plan under pressure from the European Union, and Alcan went on to acquire Algroup.

However, Alcan says it is confident it can resolve any concerns the European Commission might have regarding its latest takeover attempt.

Alcan is offering three of its own shares plus 123 euros in cash for every five Pechiney shares. The bid includes two subsidiary offers — a cash offer of 41 euros per Pechiney share, and another comprising three Alcan shares in exchange for two Pechiney shares.

For its part, Pechiney has vowed to fight Alcan’s bid, which it says “seriously undervalues the strategic potential of the Pechiney Group.” A rival bidder has yet to surface.

Alcan’s offer is conditional upon government and regulatory approvals, as well as the tendering of more than half of the total diluted number of Pechiney shares to the offer. The company expects the offer to wrap up by mid-October.