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Alpha, Massey in big U.S. coal acquisition

Jan. 30, 2011 at 4:56 PM   |   Comments

RICHMOND, Va., Jan. 30 (UPI) -- Alpha Natural Resources acquired rival U.S. coal-producer Massey Energy in a $7.1 billion deal, the companies announced.

The deal gives Alpha 110 mines and estimated reserves of approximately 5 billion tons.

"Together we will be America's largest supplier of metallurgical coal for the world's steel industry and a highly diversified supplier of thermal coal to electric utilities in the U.S. and overseas," Alpha CEO Kevin Crutchfield said in a joint statement issued by the companies Saturday. "The strategic and operational fit of our two companies is clear and compelling."

Massey was the fourth-largest coal producer in the United States, but its stock price was hit hard last year after an explosion at the company's Upper Big Branch mine in West Virginia killed 29 miners.

CNNMoney said Sunday that share prices had improved as talk of the deal surfaced late last year. In addition, coal sales worldwide are expected to improve this year due to increasing demand from India and China.

Under the terms of the deal, Massey shareholders will receive $10 cash plus 1.25 shares of Alpha for each of their Massey shares.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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