Rio Tinto's announcement it is to pay $38.1bn in cash for Canadian aluminium producer Alcan led to major increases in mining stocks today - pushing the FTSE 100 up 82.6 points, or 1.25%, to 6697.7.
The mining giant’s share price suffered though; Rio closed down 183 points, or 4.58%, to 3810.
But Vedanta Resources, Antofagasta and Xstrata fared much better.
Vedanta finished up 109 points, or 6.45%, to 1800; Antofagasta was up 43 points, or 6.39%, to 715.5; while Xstrata closed up 153 points, or 4.67%, to 3427.
British Airways was the best non-mining performer; BA soared to end the day up 22 points, or 5.26%, to 440.5.
In New York, the Dow Jones is surging to new record highs this morning, as investors welcome the multi-billion dollar M&A news.
The index is up 161.36 points, or 1.19%, 13739.23.
Alcoa has jumped to a record on speculation its failure to acquire Alcan will leave it vulnerable to a takeover.
It is currently 3 points up, or 7.07%, to 45.43.
American Express is doing well, climbing 1.94 points, or 3.22%, to 62.22; while a better than expected June sales result announcement pushed Wal-Mart up 1.12 points or 2.35%, to 48.80.
To comment on this story, contact:
0207 034 2681
Latest news and analysis
And vote now for Best Service award
Impact of rates
10 years in financial advice
Fidelity's Multi Asset investment team answer two key questions about the rise of multi asset investing