 Miners are cash rich from record commodity prices |
Under the terms of the deal, Rio Tinto, which is listed on both the London and Australian stock exchanges, will pay $101 for each of Alcan's shares.
The deal comes a few months after Alcan rejected a $27bn hostile takeover bid from US miner Alcoa on the grounds that it undervalued the firm.
Record metal prices have prompted growing consolidation in the industry.
'Vote of confidence'
Before the announcement, shares in Rio Tinto on the Australian exchange surged to record highs amid speculation that the world's second-largest mining firm was going to confirm the friendly takeover deal.
Its shares peaked at an all-time high of 105.19 Australian dollars before trading in its shares in Australia was halted pending the announcement.
The new company is to be called Rio Tinto Alcan and will have its headquarters in Montreal.
Market observers viewed the deal as a vote of confidence that the cycle of consolidation has further to run.
"That is going to put the rocket under a number of leading resource stocks, not just Rio, not just Alcan, but all the majors," said Ted Leschke, analyst at Shaw Stockbroking.