CVDR had announced that it would bid for Canadian mining firm Inco amid two other competing offers.
The Brazil-based firm, which is the worldâ€™s largest iron ore producer, stated on Friday that it would make a $17.6 billion offer for Inco, one of the worldâ€™s largest nickel producers in the world.
The two other competitors, one hostile and one friendly, were Phelps Dodge and Teck Cominco. CVDRâ€™s bid was higher than both. Any deal would be subjectto Canadian regulatorsâ€™ approval.
â€œOur offer surpasses those of our competitors. If shareholders accept it, we'll be creating the largest nickel producer in the world, Roger Agnelli, CVRD's chief executive, said at a news conference.
The global mining sector has recently witnessed a small flood of merger and acquisition activity. Inco has just came back from a bruising battle to take over Falconbridge, which was another nickel producer. That bid failed. Currently Xstrata was in the process of acquiring Falconbridge.
Trying to branch out of its core operation of extracting iron ore, CVDR was interested in expanding to other mining areas. If the bid was successful, the merged entity would be one of the worldâ€™s three largest diversified mining groups. The trend towards larger firms is playing out amid Chinaâ€™s booming appetite for raw materials to boost its economy.