Alpha Natural Resources says it is paying 21 percent more than Massey Energy's market value so the combined companies can become a global leader in metallurgical coal sales. "With the announcement Saturday that Alpha reached an agreement to acquire Massey in a cash and stock deal valued at $7.1 billion, Alpha is now poised to become the world's third-biggest producer of coal used by steelmakers just when global demand for the resource is growing and supplies are increasingly scarce," Kris Maher of The Wall Street Journal reports. Under the deal, Alpha will have 110 mines and 5 billion tons of coal reserve.
"We've always thought the combination between Massey and Alpha could be very compelling," Alpha CEO Kevin Crutchfield told Maher. "We were fundamentally convinced that the world was going to remain fundamentally under-supplied for metallurgical coal for the foreseeable future." Crutchfield said the company expects to save money on transportation and production costs thanks to the acquisition. Former Massey CEO Don Blankenship, who opposed the company's sale and retired at the end of the year, will not be part of the new company. (Read more; subscription may be required)
"Under the terms of the agreement, Massey stockholders will receive 1.025 shares of Alpha stock and $10 in cash for each share of Massey stock," Ken Ward Jr. of The Charleston Gazette reports. "Alpha will own 54 percent of the combined company and Massey will own 46 percent." Massey has faced increased regulatory and financial pressure following the April 5 explosion at its Upper Big Branch mine in Montcoal, W.Va., that killed 29 miners. The transaction is expected to close in mid-2011 and is subject to federal regulatory approval, as well as approval by the stockholders of both companies, Ward writes. (Read more)
United Mine Workers of America President Cecil Roberts said the sale is good news because Alpha has a better safety record and "Massey had come to represent all that was wrong with the coal industry." And, of course, the UMWA has "open lines of communication" with Alpha, 1,500 employees of which are members of the union. (Read more)
"We've always thought the combination between Massey and Alpha could be very compelling," Alpha CEO Kevin Crutchfield told Maher. "We were fundamentally convinced that the world was going to remain fundamentally under-supplied for metallurgical coal for the foreseeable future." Crutchfield said the company expects to save money on transportation and production costs thanks to the acquisition. Former Massey CEO Don Blankenship, who opposed the company's sale and retired at the end of the year, will not be part of the new company. (Read more; subscription may be required)
"Under the terms of the agreement, Massey stockholders will receive 1.025 shares of Alpha stock and $10 in cash for each share of Massey stock," Ken Ward Jr. of The Charleston Gazette reports. "Alpha will own 54 percent of the combined company and Massey will own 46 percent." Massey has faced increased regulatory and financial pressure following the April 5 explosion at its Upper Big Branch mine in Montcoal, W.Va., that killed 29 miners. The transaction is expected to close in mid-2011 and is subject to federal regulatory approval, as well as approval by the stockholders of both companies, Ward writes. (Read more)
United Mine Workers of America President Cecil Roberts said the sale is good news because Alpha has a better safety record and "Massey had come to represent all that was wrong with the coal industry." And, of course, the UMWA has "open lines of communication" with Alpha, 1,500 employees of which are members of the union. (Read more)
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