Xstrata has bid £33 per Lonmin share - a 42 per cent premium over its Tuesday closing price - and accused Lonmin's South African operations of underperforming.
Lonmin is the world's third-largest platinum producer, with the majority of its operations in South Africa.
The offer caused Lonmin shares to jump 47 per cent to 3407p - above the offer price. Xstrata shares were three per cent stronger.
Xstrata reported its own 13 per cent half-year revenues rise, with adjusted pre-tax profit flat at £2.9bn.
Chief executive Mick Davis said the offer marked the next step in the company's strategy to develop a significant platinum business and add diversification to its portfolio.
The company said the Lonmin business had been impacted by operational diff- ficulties over the past two years.
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