Vale quits Xstrata takeover talks

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Brazilian mining giant Vale do Rio Doce has abandoned talks to buy rival Xstrata, in what would have been the industry's biggest takeover.

Vale said it had ended talks because Xstrata would not agree to its latest offer of cash and stock.

Vale is already the world's biggest iron ore miner. With Xstrata's mining assets it would have challenged the industry leader, BHP Billiton.

The deal was reportedly worth as much as $90bn (£45bn).

'Mutual decision'

In a statement Vale said it believed its offer "would have created significant value for both sets of shareholders".

Xstrata is listed on the London Stock Exchange and has mining operations in North and South America, South Africa and Australia.

"While Vale and Xstrata continue to believe that a combination of the two companies could realise significant value for both sets of shareholders, we have not been able to reach agreement," said the company's chief executive Mick Davis.

"We have therefore mutually decided to cease talks."