Takeovers are sometimes the only way to grow. This is at the heart of Inco Ltd.'s proposal to take over Falconbridge Ltd. Falconbridge has already merged with former Noranda, and now is a perfect takeover target. The competition, however, is hoping/praying that Canadian regulators will pull the breaks on this deal.

If Inco and Falconbridge were to merge, the new entity would be the world's largest producer of nickel. The merged entity's portfolio of mines and projects would transform it into a dominant and quite demoralizing player. Worries among Inco and Falconbridge's competitors are that there would be no significant maneuvering field left in the alloy compounds market. The voice against the merger is particularly loud in Europe, where French company Eramet has expressed its concerns before the European Commission and U.S. Department of Justice.

Inco, on the other hand, is denying the potential for any such dominance by the newly merged entity. The company is particularly emphatic in its claims that unethical manipulation of nickel prices by stalling development of new mines is has not even entered the back of its mind.

In a telephone interview, Inco's CEO, Scott Hand, said that the realities of the nickel market paint quite different picture. For starters, Inco and Falconbridge are not the only producers bringing new mines on-line. Very strong in the game are BHP Billiton, Rio Tinto and Anglo American, mostly in Latin America. There is also a slew of junior producers, as well as Chinese conglomerates that are picking up stakes left, right, and center.

The funny thing about Eramet's whining is that the company is not a stranger to large takeovers itself. In March, the company bid for Canadian Weda Bay Minerals Inc. to a tune of $270.0 million. Eramet is also courting Prony West, which owns nickel-rich properties in the French Overseas Territory of New Caledonia.

To make matters even more complex, joining the Inco- Falconbridge melee is Swiss Xstrata PLC, which has almost a 20% interest in Falconbridge. Although no rival bid has been put forward by Xstrata, analysts believe the company is waiting for mid-May, when Xstrata has the option to increase its holdings in Falconbridge. If and when Xstrata increases its stake, it may place a counter bid, if for no other reason than to force Inco to sweeten its bid, therefore increasing Xstrata's already considerable paper profit in the process.

In the meantime, Inco is plugging along. While trying to ease competition worries in the U.S. and Europe, the company is also working diligently with Canadian regulators on the final approval. Currently, Inco's bid is worth $12.5 billion, and it is open until the end of June.