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Alcoa offers to buy Reynolds Metals

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Pittsburgh--Alcoa offered Wednesday to buy rival aluminum producer Reynolds Metal Co., Richmond, Va., in a cash and stock deal valued at $5.6 billion. In an open letter to Reynolds, Alcoa said talks between the two companies had been in motion since March. The letter also said that Jeremiah Sheehan, Reynolds' chairman-CEO, had publicly stated that significant growth could be achieved through merger and acquisition activity and that the metals industry is moving toward consolidation. Three other aluminum producers, Canada's Alcan Aluminum Ltd., France's Pechiney, and Switzerland's Alusuisse-Lonza, announced Tuesday a proposed three-way merger.
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