Alcan submits formal Pechiney bid to EU

Alcan (AL-T) has formally submitted its 3.4-billion-euro bid for French rival Pechiney with the European Commission.

The Montreal-based aluminum giant said it also submitted commitments to the Commission in relation to the European markets for aluminum flat rolled products, aluminum aerosols and aluminum cartridges.

Alcan, the world’s second-largest aluminum producer, originally launched its hostile bid on July 7, but held off formal notification for undisclosed “legal reasons.”

Alcan expects the Commission to announce its phase 1 decision on September 29; it expects the waiting period under the US Hart-Scott- Rodino Act will expire or be terminated by that time as well.

EU approval isn’t expected to come easily; more than three years ago, the commission quashed Alcan’s planned three-way merger involving itself, Pechiney, and Swiss group Alusuisse Lonza (Algroup). Pechiney dropped out of that plan under pressure from the European Union; Alcan went on to acquire Algroup.

In a prepared statement, the company said, “Alcan remains confident in its ability to resolve satisfactorily any concerns that the European Commission might raise during its review of the transaction.”

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.

Pechiney has vowed to fight Alcan’s bid, which it immediately said, “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 50% of the total diluted number of Pechiney shares to the offer. The Company still expects the offer to wrap up by mid-October.