Vale halts talks on $90B Xstrata deal

Vale halts talks on $90B Xstrata deal

The Brazilian miner ends negotiations after Anglo-Swiss rival rejects latest cash-stock bid.

Brazilian mining giant halts negotiations to purchase Anglo-Swiss mining company Xstrata on Tuesday.

SAO PAULO, Brazil (AP) -- Brazilian mining giant Companhia Vale do Rio Doce SA announced Tuesday that it had halted negotiations to acquire Anglo-Swiss miner Xstrata PLC in a deal reportedly worth as much as $90 billion.

Vale said in a statement that talks were discontinued after Xstrata (XTA) failed to agree to its latest offer of cash and stock. The company said it reserves the right to make a new offer within six months.

Vale, which did not disclose the value of the deal, said the acquisition "would have created significant value for both sets of shareholders." Brazilian news media previously reported the deal was worth as much as $90 billion.

The Financial Times newspaper reported last month that one of the sticking points in the deal was that Xstrata's controlling shareholder - Glencore International AG - wanted to extend its agreements to sell Xstrata-produced commodities, including coal and nickel.

Vale chief executive Roger Agnelli suggested last month that Vale was not willing to compromise on that sales issue, telling analysts at the time that "marketing is very important to us."

"We want to have a very open and straightforward relationship with our clients," he said, later telling reporters that "the whole question is not just price, but also principles, how to do business."

The purchase would be the largest ever made by a Brazilian company. Two years ago, Vale paid $17.6 billion for Canadian nickel miner Inco Ltd.

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