If it's Monday, it's time for merger and deal talk, and this one could be a doozy. Various media outlets are reporting that Vancouver-based mining specialist Teck Cominco has made a bid for fellow Canadian Inco (NYSE:N).

Although I couldn't find a press release on Teck Cominco's website, Inco has put forth its own release, and the assorted news articles are all reporting similar terms -- namely, that Teck Cominico is offering to buy this large nickel producer for either $78.50 per share Canadian (about $71 U.S.) in cash or a combination of 0.9776 shares and five Canadian cents per share of Inco. Either way, it adds up to more than a $16 billion deal.

There is, however, a catch. Teck Cominico's offer appears contingent on having Inco drop its own bid for Falconbridge (NYSE:FAL). As a refresher, this was to be a friendly deal that would make the combined company the world's second largest player in nickel behind MMCNorilsk (NASDAQ:NILSY), though the value of the deal has gone up considerably since the original announcement.

If Teck Cominco were to make a cash offer, now's the time. High prices for copper, zinc, nickel, and other commodities have been a boon to cash flow, and recent earnings growth has been pretty strong. What's more, the deal would create an interesting conglomerate with large positions in zinc, nickel, met coal, gold, copper, and oil sands -- a Canadian version, perhaps, of BHP Billiton (NYSE:BHP) or Rio Tinto (NYSE:RTP).

The premium being offered is certainly generous, and I can see some of the potential synergies and advantages to the combination. Still, management teams can be twitchy about these matters, so I'm not sure how likely this deal is to actually happen. Either way, though, it's clear that the commodity markets aren't about to settle down just yet.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).