Riversdale has agreed to a A$3.9bn takeover offer by Rio Tinto for a cash offer price of A$16 per ordinary share.

The companies have entered into a Bid Implementation Agreement, whereby Rio Tinto will acquire all of the issued and outstanding shares of Riversdale by way of an off-market takeover offer.

Rio Tinto chief executive energy Doug Ritchie said the acquisition exhibits the firm’s commitment to Africa, and forms part of the company’s strategy of investing in, developing and operating large, long-term, cost-competitive mines and businesses.

“Rio Tinto’s extensive experience in infrastructure and large project development combined with our significant financial capacity means that we are well placed to take Riversdale’s asset base through its next phase of development,” Ritchie said.

The takeover offer is subject to Rio’s acquisition of Riversdale interest in excess of 50%, and an approval from the Foreign Investment Review Board.

Rio said it will finance the offer through its existing cash reserves and credit facilities.