Alcoa Inc. said it plans to make an unsolicited $27 billion cash and stock takeover offer for Alcan Inc. to create the world’s largest aluminum producer as metal prices rally.

Each Alcan share would be exchanged for $58.60 in cash and 0.4108 of an Alcoa share. That values Alcan at $73.25, or 20% more than its closing price on May 4, New York-based Alcoa said yesterday in a statement. Shares of both companies surged, and Alcan said it would consider the offer after earlier takeover talks failed.

The combination would create a company with twice the capacity of United Company Rusal, which completed a three-way merger in March to top Alcoa as the world’s largest producer. Alcoa and Alcan have been losing market share to producers in Russia and China as aluminum prices doubled the past four years.

“This transaction makes a lot of sense because it would put them on a larger scale to compete in the global market,” a manager of $1.1 billion at Victory Capital Management in Cleveland, Kirk Schmitt, said. “I don’t think it gets done at this price, but I do think it will get done.”

Shares of Montreal-based Alcan rose $21.08, or 35%, to $82.11 at 4:15 p.m. yesterday in New York Stock Exchange composite trading, a record daily gain. Before those rises, Alcan had risen 15% in the past year. Alcoa rose $2.97, or 8.3%, to $38.63, their biggest one-day jump since November 2002.

The perceived risk of owning Alcoa and Alcan bonds rose yesterday, and Moody’s Investors Service said it may downgrade $7.4 billion of debt securities issued by the two companies.

Contracts based on $10 million of Alcoa bonds jumped $25,000 to $47,500, the highest in two years, according to prices compiled by CMA Datavision. Alcan credit-default swaps rose $15,300 to $38,000, composite prices from London-based CMA show. An increase in the five-year contracts, used to speculate on a company’s ability to repay its debt, indicates deterioration in the perception of credit quality.

“There is an expectation of a higher bid” for Alcan from Alcoa or another company, said Thomas Winmill, who manages $175 million at the Midas Fund in New York. “There have been a lot of these takeovers in the base-metals sector, where you see multiple parties enter in when one of these unique franchises come up for bid.”

Rising demand for metals has sparked 473 deals or bids in the industry this year, valued at $55.4 billion, including Hindalco Industries Ltd.’s $5.7 billion offer for Novelis Inc., data compiled by Bloomberg show. For all of 2006, there were 1,145 deals valued at $176.5 billion, including Freeport-McMoRan Copper & Gold Corp.’s $23 billion takeover of Phelps Dodge Corp.

Before yesterday, Alcoa shares had jumped 24% in the past six months partly on speculation the company may be an acquisition target. The Times of London said February 13 that Melbournebased BHP Billiton Ltd., the world’s largest mining company, and Rio Tinto Plc may be planning bids for Alcoa.

With about 368 million Alcan shares outstanding, the Alcoa offer values the company at about $26.9 billion and would be the biggest takeover ever in the metals and mining industry, based on data compiled by Bloomberg. Including debt, the deal would be valued at $33 billion.

“This offer follows almost two years of discussions between our companies regarding a variety of potential business combination transactions, including unsuccessful board-level discussions of a merger last fall,” the chief executive officer of Alcoa, Alain Belda, said on a conference call.