Alcan Inc. - MRRS Decision

Headnote

Mutual Reliance Review System for Applications-- Canadian offeror making a take-over bid of a French company- offeree issuer under no obligation to disclose a list of itsregistered shareholders, so that offeror is unable to determinethe number of Ontario holders or percentage of securities heldby Ontario holders -- believed to be 76 Ontario holders havinga de minimis number of offeree securities-- offer madein compliance with federal securities laws of the United States- bid exempted from requirements of Part XX, subject to certainconditions. Offeror may include new listing and supplementallisting statements in offering documents.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 38(3), 93(1)(e), 95-100 and 104(2)(c).

(TRANSLATION)

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

THE PROVINCES OF

QUEBEC, ONTARIO, BRITISH COLUMBIA,

ALBERTA, MANITOBA, NOVA SCOTIA

AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

ALCAN INC.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the Provinces of Quebec, Ontario, British Columbia, Alberta,Manitoba, Nova Scotia and Newfoundland and Labrador (the "Jurisdictions")has received an application from Alcan Inc. (the "Applicant")for a decision under the securities legislation of the Jurisdictions(the "Legislation") (a) exempting the unsolicitedtender offer (the "Offer") of the Applicant for allthe issued and outstanding common shares of Pechiney, the BonusAllocation Rights of Pechiney, the American Depository Sharesof Pechiney ("Pechiney ADS"), the OCEANEs (obligationsà option de conversion en actions nouvelles et / ou d'échangeen actions existantes) of Pechiney (collectively the "PechineySecurities") from (i) the prospectus and registration requirementsof the Legislation (in applicable Jurisdictions) and (ii) thetake-over bid requirements of the legislation and (b) authorizingthe Applicant to include in the documentation relating to theOffer, statements to the effect that the Applicant will applyto list Alcan Common Shares (defined below) on Euronext Parisand that Alcan will also apply for the supplemental listingof the Alcan Common Shares to be issued in connection with theOffer on the New York, Toronto, London and Swiss Exchanges (exceptfor British Columbia);

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québecis the principal regulator for this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 -- Definitions or in Quebec Commission Notice14-101;

AND WHEREAS the Applicant has representedto the Decision Makers that:

(a) the head office of the Applicant is locatedin Montreal, Quebec;

(b) the Applicant is a company incorporatedunder the laws of Canada;

(c) the Applicant is a reporting issuer ingood standing in all Provinces and Territories of Canada;

(d) the authorized capital of the Applicantconsists of an unlimited number of common shares (the "AlcanCommon Shares") and an unlimited number of preferenceshares issuable in series (the "Alcan Preference Shares")of which 321,739,502 Alcan Common Shares were outstandingand 5,700,000 Series C, and 3,000,000 Series E, redeemablenon retractable Alcan Preference Shares were outstanding asof the close of business on June 30, 2003.

(e) the common shares of the Applicant arelisted on the New York Stock Exchange, the Toronto Stock Exchange,the London Stock Exchange and the SWX Swiss Exhange;

(f) Pechiney is incorporated under the lawsof France and its head office is located in Paris, France;

(g) Pechiney does not have a reporting issueror equivalent status in any of the Provinces du Canada;

(h) according to Pechiney Notice No. 203 C0962addressed to the Conseil des Marchés Financiers(the "CMF") and dated June 26, 2003, there were82,622,783 Common shares of Pechiney outstanding. Accordingto the 2002 Annual Report of Pechiney filed with the Commissiondes opérations de bourse (the "COB")on March 19, 2003, there were 7,908,636 OCEANEs outstanding.According to the Pechiney notice addressed to Euronext ParisNo 2003-1572 dated May 28, 2003, there were 1,091,040 BonusAllocation Rights outstanding.

(i) Pechiney Common Shares, Pechiney BonusAllocation Rights and Pechiney OCEANEs are listed on EuronextParis and Pechiney ADS are listed on the New York Stock Exchange;

(j) the Applicant has announced its plan tolaunch the Offer on July 7, 2003;

(k) the Offer consists of 60% in cash and40% in new Alcan Common Shares. The main characteristics ofthe Offer include:

• Principalmixed offer: € 123 in cash and 3 Alcan Common Sharesfor every 5 Pechiney Common Shares or every 50 PechineyBonus Allocation Rights or every 10 Pechiney ADS;

• Subsidiarycash offer: € 41 per each Pechiney Common Share oreach 2 Pechiney ADS or € 4.1 in cash for each PechineyBonus Allocation Right;

• Subsidiaryshare offer: 3 Alcan Common Shares for every 2 PechineyCommon Shares or each 20 Pechiney Bonus Allocation Rightsor each 4 Pechiney ADSs;

• These twosubsidiary offers will need to respect the final portionof 60% in cash and 40% in Alcan Common Shares;

• Cash offeron OCEANEs: € 81.70 in cash for each OCEANE.

(l) under the Legislation of the Jurisdictions,every person intending to make a distribution of securities,as the Applicant who is offering Alcan Common Shares, shallprepare a prospectus and shall be registered as a dealer;

(m) under the Legislation of the Jurisdictionsof Ontario, Nova Scotia, Alberta, Manitoba and Newfoundlandand Labrador, a trade in security of an issuer that is exchangedwith the security holders in connection with a take-over bidor an exempt take-over bid, as is the case in connection withthe Offer, is automatically exempted from the prospectus andregistration requirements;

(n) under the Legislation of the Jurisdictionsof Quebec and British Columbia only the trade in securitiesin connection with take-over bids that are exempt from theTake-Over Bid Requirements (as defined below) pursuant tospecific provisions of the relevant Legislation are exemptfrom the prospectus and registration requirements;

(o) the Applicant can not rely on specificprovisions and is seeking discretionary relief from the Take-OverBid Requirements (as explained below), therefore it is alsoseeking discretionary relief from the prospectus and registrationrequirements under the Legislation of the Jurisdictions ofQuebec and British Columbia;

(p) the preliminary Prospectus includes asection ("Listing of Alcan Common Shares") whereit is stated that: "Alcan will apply to list its AlcanCommon Shares on Euronext Paris, subject to the successfulcompletion of the Offers. Alcan will also apply for the supplementallisting of the Alcan Common Shares to be issued in these offerson the New York, Toronto. Paris, London and Swiss stock exchanges";

(q) under the Legislation of the Jurisdictions,except British Columbia which provides a blanket permission,it is an offence, to declare that the security will be listedor that an application will be made, except with the expressauthorization of the Decision Makers;

(r) the Offer will be made through two separateoffers : (i) a U.S. offer open to all holders of Pechineysecurities who are located in the United States and Canada,and (ii) a French offer open to all holders of Pechiney securitieswho are located inside France and outside of France (exceptin the United States and Canada) if, pursuant to the locallaws and regulations applicable to such holders, they arepermitted to participate in the French offer.

(s) the U.S. offer will be in compliance withthe federal securities laws of the United States of America;

(t) the Applicant will file a registrationstatement on form S-4 (the "Prospectus") with theSecurities and Exchange Commission ("SEC") and theOffer will be made to holders of Pechiney securities onceAlcan has received the following authorizations :

(i) approval decision of the CMF, whichwas obtained on July 16, 2003;

(ii) review of Offer documentation by theCOB and SEC; and

(iii) approval decision made by French Ministryof Economy, Industry and Finance, which was obtained onSeptember 5, 2003.

(u) the Applicant has filed with the SEC onJuly 7, 2003, a preliminary Prospectus;

(v) the Applicant anticipates that the Offerwill be open for acceptance in the third quarter of 2003;

(w) the Prospectus discloses all informationrequired under Federal securities laws of the United Statesincluding information as to (i) Alcan, (ii) Pechiney, (iii)the reasons for the Offer, (iv) the Terms of the Offer, and(v) Financial Information.

(x) the Offer constitutes a take-over bidas defined in the Legislation and is therefore subject tothe take-over bid requirements set out in the Legislation(the "Take-Over Bid Requirements") unless otherwiseexempt from those Take-Over Bid Requirements pursuant to (i)specific provisions of the Securities Act or (ii) discretionaryrelief from statutory requirements granted by the DecisionMaker in each Applicable Province.

(y) an offerer may use the exemption prescribedby the Securities Act (the "De Minimis Exemption")in order to be relieved from the Take-Over Bid Requirementswhere :

(i) the number of holders in the ApplicableProvince of securities of the class subject to the bid isfewer than 50;

(ii) the securities held by such holdersconstitute, in the aggregate, less than 2% of the outstandingsecurities of that class;

(iii) the bid is made in compliance withthe laws of a jurisdiction recognized by the securitiesregulatory authority in the Applicable Province; and

(iv) all material relating to the bid thatis sent by the offeror to holders of securities of the classthat is subject to the bid is concurrently sent to all holdersin the Jurisdiction of such securities and filed with thesecurities regulatory authority in the Applicable Province.

(z) Pechiney securities may be registeredin the name of the holder or in the name of a nominee. Pechineyhas no obligation to disclose the list of its registered securityholders and the Applicant was not able to obtain such a list;

(aa) according to the information that theApplicant was able to obtain, there are 254 holders who residein the Jurisdictions and they hold, in the aggregate, 0.20%of the outstanding Pechiney securities, of these holders ofPechiney securities; 142 (holding 0.17% of Pechiney securitiesoutstanding) are resident in the Province of Quebec, 76 (holding0.02% of Pechiney securities outstanding) are resident inthe Province of Ontario, 15 are resident in the Province ofBritish Columbia, 10 are resident in the Province of Alberta,2 are resident in the Province of Manitoba, 3 are residentin the Province of Nova Scotia and 6 are resident in the Provinceof Newfoundland and Labrador;

(bb) the Applicant cannot rely on the De MinimisExemption because the Applicant cannot determine with absolutecertainty the number of holders of Pechiney securities residentin the Jurisdictions or the percentage of Pechiney securitiesheld by residents of the Jurisdictions and because there aremore than 50 holders of Pechiney securities in the Provinceof Quebec and in the Province of Ontario;

(cc) holders of Pechiney securities residentin the Jurisdictions will be treated equally with other holdersof Pechiney securities;

(dd) the Prospectus and all other documentationsent to holders of Pechiney securities who reside in the UnitedStates will concurrently be sent to all identified holdersof Pechiney securities who reside in the Jurisdictions andbe filed with the securities regulatory authority in the Jurisdictions;

(ee) identified holders of Pechiney who residein Quebec will be provided concurrently with a summary inFrench of the Prospectus;

(ff) the Applicant will issue a press releaseand place an advertisement in an English newspaper and a Frenchnewspaper of general circulation in Canada advising of theOffer, describing its principal terms and conditions and describinghow holders of Pechiney Securities can obtain copies of theProspectus.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Makers with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Applicant is exempt from: (a) inthe Jurisdictions of Quebec and British Columbia, the prospectusand registration requirements and (b) the take-over bid requirementsof the Legislation in connection with the Offer, provided thatthe Applicant complies with the following conditions: (i) theOffer and any amendments thereto are made in compliance withthe laws of the United States (ii) all material relating tothe Offer sent by or on behalf of Alcan to holders of Pechineysecurities resident in the United States be sent concurrentlyto all identified holders of Pechiney securities who residein the Jurisdictions and be filed with the securities regulatoryauthority in the Jurisdictions (iii) in the case of the identifiedholders of Pechiney securities who reside in the Province ofQuebec, a summary in French of the Prospectus be sent concurrentlyto such holders, and (iv) a press release be issued and an advertisementbe placed in an English newspaper and a French newspaper ofgeneral circulation in Canada advising of the Offer, describingits principal terms and conditions and describing how holdersof Pechiney Securities can obtain copies of the Prospectus.The Decision Makers (except for the Decision Maker of BritishColumbia) also authorize the Applicant to include in the documentationrelating to the Offer, statements to the effect that the Applicantwill apply to list Alcan Common Shares on Euronext Paris andthat Alcan will also apply for the supplemental listing of theAlcan Common Shares to be issued in connection with the Offeron the New York, Toronto, London and Swiss Exchanges.

September 19, 2003.