US $5 bln mining deal hits limits of coal revival
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Robert Cyran
NEW YORK, Aug 21 (Reuters Breakingviews) -Consol Energy and Arch Resources are teaming up in a no-premium merger. Though the combined group will dig up cost savings and have more cash to buy back stock, shareholders gave the union a tepid reception. The rock’s future is less dismal, but the investor pool remains narrow.
Full view will be published shortly.
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CONTEXT NEWS
Arch Resources and Consol Energy said on Aug. 21 they had agreed to merge in an all-stock agreement. Arch shareholders will receive 1.326 Consol shares for each share they hold. Investors in Arch will own 45% of the new company, and Consol shareholders 55%. The new company will be called Core Natural Resources.
Jimmy Brock, chairman and chief executive of Consol will become executive chairman of the board for new company. Paul Lang, chief executive of Arch, will become CEO of the combined company and a member of the board of directors.
The new company will produce around 12 million tons per annum of metallurgical coal and 25 million tons per annum of high calorific value thermal coal.
Shares in Arch were up 7% at $135.3 by late morning in New York on Aug. 21. Consol shares were up 6%.
Editing by Peter Thal Larsen and Pranav Kiran
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