Brazil's Vale Preparing Bid for Xstrata: Reports

Brazilian mining giant Vale is preparing to make a bid for Anglo-Swiss rival Xstrata in deal that could be worth $90 billion, local newspapers reported on Monday.

Citing sources close to Vale, Valor Economico and O Estado de Sao Paulo said the miner is in advanced talks with a consortium of banks to obtain financing for the deal, which would mark the biggest takeover ever by the Brazilian company.

Vale, which until recently was known by the acronym CVRD, declined to comment on the reports.

The reports said Vale is also in talks with Xstrata's biggest shareholder, privately held commodities trader Glencore, to accept up to $30 billion in voting shares as part of the payment. The rest would be paid in cash, the reports said.

Glencore, which has 34.6 percent of Xstrata, signaled it would accept the offer, according to Valor.

Xstrata's shares closed lower by 5.5 percent on general market selling.

Xstrata has been the subject of takeover talk for months. In December, it confirmed that it held initial talks about a possible takeover but said no proposals were made.

Already the world's leading producer and exporter of iron ore, Vale has been aggressively expanding overseas in recent years as it seeks to diversify into other metals.