Resource giant Rio Tinto Group (ASX: RIO) has agreed to buy Australian-listed coal miner Riversdale Mining Ltd (ASX: RIV) for A$16 a share, in a deal which values the target at around $3.9 billion.

The two companies said on Thursday they have entered into a bid implementation agreement (BIA) for a cash offer by Rio Tinto to acquire all of the issued and outstanding shares of Riversdale by way of a recommended off-market takeover offer.

Shares in Riversdale, which said earlier this month it was talking to Rio about a A$15 per share offer, were placed in a trading halt on Tuesday ahead of announcement on the Rio bid.

"The offer price of A$16 per share values Riversdale at approximately A$3.9 billion and represents a 46 per cent premium to the one-month volume weighted average price (VWAP) of Riversdale shares to November 3, 2010 and a 24 per cent premium to the one-month VWAP of Riversdale shares to December 3, 2010," Rio said.

The offer will be financed through Rio Tinto's existing cash reserves and credit facilities.

The Riversdale directors have recommended, in the absence of a superior proposal, that shareholders accept Rio Tinto's offer and have indicated they intend to accept the offer for shares in Riversdale which they control.

Riversdale's executive chairman Michael O'Keeffe, managing director Steve Mallyon and chief financial officer Niall Lenahan have entered into pre-bid agreements in relation to shares in which they have a relevant interest.

In aggregate, Rio Tinto has secured pre-bid agreements in relation to 14.9 per cent of Riversdale's current shares on issue.

Doug Ritchie, Rio Tinto chief executive Energy said: "The acquisition of Riversdale is in line with our growth strategy of investing in, developing and operating large, long term, cost-competitive mines and businesses driven by the quality of each opportunity."

"This investment underlines Rio Tinto's commitment to Africa. Our reach extends beyond our operating mines to include an extensive exploration programme and numerous active projects in the region."