Inco-Phelps Dodge marriage is off
By Tom Stundza -- Purchasing, 9/5/2006 9:50:00 PM
Ontario-based Inco Ltd. and Arizona-based Phelps Dodge Corp. have cancelled plans for a $17.7 billion merger due to a weak reception from the investment community. Inco is now left with a sole suitor. On Aug. 11, Brazil-based miner Companhia Vale do Rio Doce announced an all-cash offer worth $19.35 billion. “It was very clear from the proxies we received that Inco shareholders were not going to support the Phelps Dodge transaction,” Scott Hand, Inco's CEO, said in a statement this morning. “The two companies agreed that it was in our respective best interests to move on.” Inco said that terminating the Phelps agreement frees up the company to pursue other options, such as the CVRD bid. "Inco cautions that there can be no assurance that such actions will lead to Inco entering into discussions or negotiations resulting in a binding agreement with respect to any transaction with any party." Phelps Dodge Chief Executive Officer Steven Whisler had sought to expand beyond copper by acquiring both Inco and Falconbridge in what would have been the largest mining purchase ever proposed. Falconbridge shareholders instead accepted a hostile cash offer from Swiss mining company Xstrata.
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