Diamond Fields Agrees to $3.2-Billion Takeover by Inco

Diamond Fields Resources Inc., which controls the world’s largest nickel strike, on Wednesday agreed to a $3.2-billion takeover offer from Inco Ltd., brushing aside a rival bid from Falconbridge Ltd.

The acceptance by Diamond Fields pushes the battle between Inco and Falconbridge, two of the world’s largest nickel miners, for control of the huge Voisey’s Bay deposit to its final stages.

“Inco and DFR have now executed definitive agreements relating to the proposed transaction,” Diamond Fields said in a statement.

The decision in effect shuts out Falconbridge, which started the bidding for Vancouver-based Diamond Fields on Feb. 9 with a friendly merger offer valued at $3.1 billion.

Inco, defending its position as the largest nickel miner in the Western world, struck back with its bid on March 26.

Falconbridge scrambled to avert a bidding war on Tuesday by offering a compromise proposal that would have shared the deposit equally with Inco, its ally and sometime rival on the Sudbury nickel field in Ontario. The effort failed.