Tuesday, November 18, 2008

Economy, shareholder lawsuit kill coal-iron merger

North America's largest iron-ore company and Virginia's largest coal company have called off what might have been the largest-ever acquisition of a U.S. coal company. "Alpha Natural Resources and Cliffs Natural Resources, formerly Cleveland-Cliffs Inc., announced yesterday that they have agreed to terminate the merger agreement that was announced this summer and originally valued at $10 billion," reports The Coalfield Progress of Norton, Va.

When the sale was announced in July, supplies of coal and iron ore were tight. But the economy "has changed dramatically," the twice-weekly newspaper notes, and one of Cliffs' major shareholders, Harbinger Capital Partners, challenged the deal. The firm owns 18 percent of Cliffs. The companies agreed to settle a lawsuit filed by Harbinger and other stockholders.

Alpha, based in Abingdon, Va., has 3,640 employees and mines in Kentucky, Virginia, West Virginia and Pennsylvania. For more of the story, by Keith Strange and Jenay Tate, click here.

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