Pechiney says oui to sweetened deal

French aluminum producer Pechiney has accepted a new sweetened takeover offer from Alcan (AL-T).

The new cash-and-share offer is worth 47.50 euros per share and includes a bonus of 1 euro per share, provided 95% of the French rival’s shares are tendered. Including the bonus, the deal values Pechiney at about 4 billion euros. Alcan is offering 24.60 euros in cash plus 22.90 euros worth of its shares for each Pechiney share tendered.

Alcan is also offering 83.4 euros in cash for each of Pechiney’s convertible bonds. If 95% are turned in, note holders get an extra 0.40 euro per bond. Finally, shareholders tendering Pechiney bonus allocation rights would get an additional 0.10 euro per right.

The new bid tops Alcan’s original July bid, valued at 41 euros per share at the time, and a subsequent proposal of 47-48 euros per share, both of which were immediately dismissed as too low.

The revised offer is conditional on the approval of more than half of Pechiney’s shareholders, and on the approval of competition authorities in the European Union and U.S.

Alcan has filed the new offer with France’s stock market regulator, Conseil des Marches Financiers, as well as market watchdog Commission des operations de bourse and the U.S. Securities and Exchange Commission. Each body is expected to render its decision before the end of September. The European Commission is expected to deliver its decision by Sept. 29. Alcan has said it will drop its bid if regulators insist on a full 4-month review.

The commission previously blocked a merger between the two in 2000. That deal was part of a larger, 3-way deal that, in the end, saw Alcan swallow up Swiss group Alusuisse Lonza (Algroup).

This time around, Alcan has agreed to make concessions aimed at appeasing the commission, including the sale of up to 5% of the combined entity’s potential sales. Those assets include Alcan’s half-owned AluNorf rolling mill (the balance of which is owned by Norsk Hydro) in Germany or Pechiney’s Neuf-Brisach rolling mill in France.

The control of these two mills, together with Alcan’s refusal to sell off control in either, was seen as a major stumbling block in its last attempt to join forces with Pechiney. Alcan has also said it would sell some of its packaging assets if regulators deem it necessary, and it has pledged to sell either Pechiney’s or its own European aerosol can business and aluminum cartridge operations.

France’s Finance Ministry recently granted Alcan permission to proceed with its bid after considering Pechiney’s role in the French defence sector.