TORONTO (Bloomberg) — Canadian stocks rose, sending the benchmark index to another record, after Rio Tinto offered to buy aluminium maker Alcan Inc. for $38.1 billion, fuelling takeover speculation concerning other materials stocks.A five-year rally in commodities that's lifted many metals to records has spurred more than $106bn of proposed takeovers in the global mining and metals industry so far this year, according to Bloomberg data. Thompson Creek Metals Co. and Teck Cominco Ltd. gained along with Alcan on the Toronto stock exchange yesterday.

Consolidation among materials producers, which account for almost one-fifth of the Standard & Poor's/TSX Composite Index helped lift Canada's stock benchmark to an all-time high this week as investors speculated about which will be the next company to be taken over. The S&P/TSX rose the most in two weeks, adding 189.91, or 1.3 percent, to 14,356 in Toronto to surpass its previous record, set on July 9.

M&A "will push materials stocks higher as people look for other opportunities," said Jean-Rene Ouellet, who helps oversee $15.6bn as analyst at the portfolio advisory group of Desjardins Securities Inc. in Montreal. "The equity market cycle is not over."

Shares of Alcan jumped C$8.35, or 8.9 percent, to C$102.75. Rio Tinto, the London-based miner of as many as 19 metals and minerals in six continents, agreed to pay $101 (C$106) a share in cash for Alcan, 33 percent more than Alcoa's bid of $76 a share, to form the world's biggest aluminium maker.

The transaction would triple Rio Tinto's aluminium output and would be the biggest takeover in the metals and mining industry. Alcan shares have risen 52 percent since the day before Alcoa announced its bid on May 7.

Brazil's Cia. Vale do Rio Doce, the world's biggest iron-ore producer, said it hasn't ruled out a possible bid for Alcan, though no talks are planned. In January it paid $16.7 billion for Canadian nickel miner Inco Ltd.

Alcan paced a 2.9 percent gain in a measure of materials stocks, taking its year-to-date gain to 22 percent.