UPDATE 3-Brazil's Vale says Xstrata takeover talks fail

(Rewrites throughout with CEO and analyst comments)

By Reese Ewing and Eric Onstad

SAO PAULO/LONDON, March 25 (Reuters) - Brazil's Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz) (RIO.N: Quote, Profile, Research, Stock Buzz), the world's largest iron ore miner, said on Tuesday that talks to buy Swiss rival Xstrata had failed and that Vale would look at other potential takeover targets.

If Vale had succeeded, the deal would have been one of the largest corporate takeovers in history. Some analysts had valued Xstrata at up to $90 billion.

Vale's (VALE5.SA: Quote, Profile, Research, Stock Buzz) (RIO.N: Quote, Profile, Research, Stock Buzz) 48-year-old chief executive Roger Agnelli, a former banker said to have a nose for great deals, said talks fell through because both sides had failed to agree on marketing rights for the potential future company.

But a source with direct knowledge of the deal said price was the ultimate culprit that brought down negotiations.

Xstrata confirmed the talks had collapsed.

"While Vale and Xstrata continue to believe that a combination of the two companies could realize significant value for both sets of shareholders, we have not been able to reach an agreement," Xstrata's (XTA.L: Quote, Profile, Research, Stock Buzz) chief executive Mick Davis said without giving a reason for the breakdown in talks.

Agnelli denied that talks were scuppered by problems in financing the deal. Its takeover attempt has coincided with tumultuous volatility in global equity and credit markets.