updated 8/11/2006 9:32:44 AM ET 2006-08-11T13:32:44

Brazilian mining firm Companhia Vale do Rio Doce said Friday it plans to make a tender offer of 17 billion Canadian dollars ($15.16 billion), cash for Canadian miner Inco Ltd., competing with similarly valued offers from two other mining companies.

The deal amounts to 86 Canadian dollars ($76.69) per share.

Rio de Janeiro-based CVRD said the deal would create one of the three largest diversified mining companies in the world, with positions in iron ore, pellets, nickel, bauxite, alumina, manganese and ferroaloys.

Inco, with 2005 earnings of $836 million on $4.52 billion revenue, is the world's second-largest producer of nickel.

CVRD, the world's largest producer of iron ore, said it would finance the acquisition with money borrowed through a loan facility provided by Credit Suisse, UBS, ABN AMRO and Santander. Those banks are also acting as financial advisers to CVRD.

The company said it will make a formal offer on Monday. CVRD will complete the deal if Inco shareholders tender at least two-thirds of the company's outstanding shares. CVRD has not spoken to Inco about the deal.

The offer competes with cash-and-stock offers from Phoenix-based copper miner Phelps Dodge Corp. and Teck Cominco. On Monday, Inco said that a bid of 82.50 Canadian dollars ($72.30) in cash and stock by Vancouver-based Teck Cominco was not superior to a prior offer by Phelps Dodge. It advised shareholders reject Teck Cominco's bid.

Shares of Inco Ltd. rose $2.42, or 3.2 percent, to $79 in pre-market trading on the INET electronic exchange, while CVRD shares added 61 cents, or 2.7 percent to $23.50.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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