Tom Albanese, the former CEO at Rio Tinto, is out but Wall Street Journal (paywall) looked back to revisit what one principal called “the worst decision ever”: Rio Tinto buying Alcan for 38.1 billion in 2007.
In 2007 Rio Tinto’s new CEO Albanese got a bidding war with Vale and Alcoa and ended up paying a 65% premium for Alcan.
Dick Evans, former CEO of Alcan, says in the WSJ that the decision to buy was the “. . . worst decisions ever, the largest metals and mining transaction in the history of the world at the high point in the commodity cycle.”
What made the decision so bad?
Creative Commons image from Stewart Black