PITTSBURGH — Aluminum producer Alcoa Inc. has withdrawn a $28 billion hostile takeover bid for Canadian competitor Alcan Inc. after mining giant Rio Tinto entered a significantly higher bid.

The Pittsburgh-based company relinquished its offer less than a day after Rio Tinto and Alcan jointly announced the competing $38.1 billion cash bid that would create the world's largest aluminum company.

Alain Belda, Alcoa's chairman and chief executive, said the Anglo-Australian miner's offer "strongly reinforces our view of the underlying value in the aluminum industry and its bright prospects for the future."

"However, at this price level, we have more attractive options for delivering additional value to shareholders," he said in a statement.

Rio Tinto's bid is 65.5 percent higher than Alcan's closing share price before Alcoa's May 4 takeover bid, and nearly 33 percent higher than Alcoa's offer, according to Rio Tinto and Alcan.

Alcoa and Alcan were the world's top two aluminum makers until March, when the Moscow-based United Company Rusal surpassed Alcoa as the leading producer after being formed through a three-way merger.

Belda said Alcoa will continue to "make targeted growth investments, trim underperforming businesses and further enhance returns to shareholders by resuming our share-repurchase program," which was suspended amid the Alcan offer.

"That is a better path forward for our shareholders, our employees and our communities," he said.

Alcoa approached Alcan shareholders with its bid in early May, after nearly two years of private talks failed to produce a negotiated agreement. Alcan repeatedly dismissed the offer as inadequate and fraught with regulatory and other risks.