Alpha to Buy Massey for $8.5 Billion

Jan. 31, 2011
The two companies will own more than 110 mines and combined coal reserves of approximately five billion tons.

Alpha Natural Resources announced on Jan. 29 plans to buy Massey Energy Co. for $8.5 billion, in a tie-up of two giant coal producers.

"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," said Kevin Crutchfield, Alpha's CEO.

The deal approved by the boards of both firms places a value of $69.33 per share of Massey common stock, valuing the group at $8.5 billion, and would be a 21% premium to Massey's current share price.

After completion, Alpha would own 54% of the combined firm and Massey stockholders 46%. The deal still requires shareholder and regulatory clearance.

"The merger will bring together Alpha's and Massey's highly complementary assets, which include more than 110 mines and combined coal reserves of approximately five billion tons, including one of the world's largest and highest-quality metallurgical coal reserve bases," the firms said.

"Alpha and Massey believe the new entity will be well positioned to capitalize on strong global demand trends for coal including the metallurgical coal used in the steel manufacturing process. Further, the combination is expected to permit Alpha and Massey to benefit from geographical and asset diversification, including operations and reserves in Central and Northern Appalachia, the Illinois Basin and the Powder River Basin in Wyoming."

Alpha says it is the third largest U.S. coal producer.

Massey is the operator of the West Virginia mine where a gas explosion killed 29 people last year and is the fourth largest coal producer in the United States.

Copyright Agence France-Presse, 2011

Popular Sponsored Recommendations

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

Are You Positioned To Tackle Supply Chain Risk?

Sept. 20, 2023
Supply chain disruption is here to stay, but you can keep ahead of potential issues — and identify new opportunities — by regularly assessing your suppliers. Download our supplier...

Disruptive EV Technologies Are Driving New Supplier Realities

Sept. 20, 2023
Vehicle electrification is upending the automotive landscape, forcing suppliers to make critical strategic and operational decisions. Understand what that means for you in our...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!