Walter Energy to acquire Canada’s Western Coal for $3.25 billion
03 Dec 2010
Walter Energy, Inc, a US producer and exporter of metallurgical coal for the US steel industry, today formally agreed to buy Western Coal, for C$3.3 billion ($3.25 billion) in cash and stock, after announcing its bid for the Canadian coal miner last month.
Florida-based Walter will pay C$11.50 a share, a premium of 56 per cent to Western Coal's closing price on 17 November, a day prior to Walter Energy announcing its takeover proposal. (See: US coal miner Walter Energy launches $3.24 bln bid for Canada's Western Coal)
While announcing its proposal last month, Western had said that it has entered into exclusivity talks with Walter for 14 days until 1 December while both companies undertake due diligence work.
Western Coal shareholders will get about C$2.1 billion in cash and own about 14 per cent of the enlarged company, which will have a market capitalisation of more than $8.3 billion.
The combined company will have total coal reserves of about 385 million tons and expects to produce more than 20 million tons of coal by 2012.
It would be the leading, publicly-traded 'pure-play' metallurgical coal producer in the world, with unique and strategic access to steel producing markets in both the Atlantic and Pacific Basins.
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