Phelps Dodge Corp., moving to create the world's largest copper producer, raised its offer for Cyprus Amax Minerals Co. and Asarco Inc. to $2.66 billion in stock today after the companies rejected a lower bid.

Phelps is offering premiums of about 30 percent for Cyprus Amax and Asarco, which agreed last month to a $2.2 billion merger that would form the second-largest producer. If they refuse to enter talks, Phelps said, it will take "all necessary steps" to acquire them. Cyprus and Asarco had no immediate comment.

Phelps Dodge, now fourth-largest firm in the copper industry, is joining metal producers of all kinds in the rush to create bigger companies so they can reduce costs in the face of falling prices. In the next 10 years, analysts have said, the top 20 copper producers likely will be folded into half as many companies.

"This is another step along this globalization path," said Nick Moore, head of Flemings Global Mining Group. "We've seen it in oil, aluminum; we're now seeing it in copper."

Phoenix-based Phelps also said it has made "numerous unsuccessful attempts" to negotiate a transaction with Cyprus and Asarco since they announced their combination on July 15.

Copper prices hit a 12-year low of 60.80 cents a pound in May, trimming profit and leading to widespread job cuts in the industry.

Asarco stock rose $4 a share, to $22.43 3/4 today, and Englewood, Colo.-based Cyprus Amax rose $2.87 1/2, to $17.37 1/2. Phelps Dodge gained 56 1/4 cents, to $59.12 1/2.

Phelps Dodge initially offered to swap 0.3756 of its shares for each Asarco share, or $22 each, and 0.2874 shares for each Cyprus Amax share, or $16.83 each, according to the target companies. The new offer is now 0.4098 shares for each Asarco share, or $24.05 each, and 0.3135 shares for each Cyprus share, or $18.40.

The new Phelps Dodge's offer values Cyprus Amax at about $1.7 billion and Asarco at about $960 million.

Investors said a combination of Phelps, Asarco and Cyprus would be able to reduce excess copper production and boost profits.

The boards of Cyprus Amax and Asarco met separately Thursday to consider the initial takeover offer, and rejected it as not being in the "best interests" of shareholders.