Updated from 12:17 p.m. EDT
, the mining and metals company, said Friday that it would acquire
of Canada for about $1.1 billion in cash, advancing into the global copper producing business while rolling over a rival bid made by
U.K.-based Billiton said it would exchange roughly $18.12 for each Rio Algom share, which represents a 49% premium over the company's closing price of $12.19 on Monday, the day before the offer announcement from Noranda. Those figures are based on a currency exchange rate of 1.49 Canadian dollars for each U.S. dollar.
Noranda had said on Tuesday that it would pay about $16.55 a share, providing a 35% premium over Rio Algom's share price on the previous day. Noranda also said it had planned to sell a 50% stake of Rio Algom's assets to
, a copper-producing company control by the government of Chile.
Although Toronto-based Rio Algom rebuffed Noranda's overtures, saying the Noranda bid was unsolicited, its shares soared 46% Tuesday. Rio Algom finished Friday regular trading up 1 11/16, or 10%, at 19 3/8.
Still, the deal must win approval from regulators as well as stockholders who hold two-thirds of Rio Algom shares. The Rio Algom board unanimously recommended the agreement with Billiton, the companies said.
Rio Algom produces copper from mines in Chile, Argentina and Canada and has a portfolio of mainly copper and zinc development and exploration assets in South America "Rio Algom will bring to Billiton a quality portfolio of low-cost, high-growth operating assets and development properties," Billiton said in a statement.
Billiton said the transaction could make a dent in profits this year, but added that after the start of Rio Algom's copper-zinc project in Peru, which is expected in the second half of 2001, earnings could get a boost.