2. The acquisition
Since 2000, the price of non-ferrous metals has sharply soared. The price of Nickel made no exception to the rule, making companies such as Inco or Falconbridge very attractive. A big battle over Canadian companies thus started in the mid 2000’s with both friendly and hostile takeovers. In this context, in 2006 Vale made a $17,6bn offer to Inco, which was finally accepted in 2007, after the offer had reached $19,4bn.

2.1 Why did Vale want to acquire Inco ?
Vale’s strategy was to diversify its products. In the mining field, diversification of products also means diversification of markets and geographic asset bases. The most profitable strategy for Vale (or any other company) at this time was to invest in Nickel. So the very first goal of Vale acquiring Inco was to become the world’s largest producer of Nickel. Before the acquisition, the Brazilian company was the first producer of iron ore in the world, and an important producer of bauxite, copper, and aluminium. By becoming a major actor in the Nickel industry, Vale could aspire to be the world’s first mining company, all metals taken together. To achieve this goal, two projects were actually in the oven : the purchase of Inco and the purchase of Canico Resources Corp., also called the Onca Puma Nickel Project.

Another reason why Vale wanted to get bigger was Brazilian patriotism and pride. Indeed the Brazilian economy had collapsed over the last decade, and needed companies like Vale to recover and show the power of its industry.

2.2 Why Inco chose Vale’s offer ? In 2006, Inco was proposed many deals, and almost concluded one with the American company Phelps Dodge, in order to acquire Falconbridge (another important actor in the Nickel industry) and thus become the world’s leader in Nickel production. But after the merger with Phelps fizzled out in 2007, Inco’s shareholders chose to accept Vale’s offer, which was then the highest offer, reaching $86 per share.

2.3 Conditions of