Alcan Inc. has begun negotiating toward a merger agreement with Rio Tinto PLC to fend off a hostile bid from U.S. rival Alcoa Inc., Canada's the Globe and Mail newspaper reported on its Web site.

Britain's Times newspaper also reported that Rio was poised to launch a $34 billion takeover of Alcan, saying that Wall Street bankers believe the rival offer is ready to go hot with a formal approach within two weeks.

An Alcan spokeswoman could not immediately be reached for comment. A Rio spokesman in London had no comment.