Tags: Arch Coal | International Coal Group

Arch Coal to Buy Rival International Coal Group for $3.4 Billion

Monday, 02 May 2011 12:33 PM

Arch Coal will buy rival International Coal Group in an all-cash deal valued at $3.4 billion, the companies said Monday.

The new company will form the nation's second largest supplier of metallurgical coal, which is used to make steel, the companies said. Met coal is in high demand overseas, especially in China. It's used in everything from building frames to railroad tracks.

Arch Coal Inc. expects the deal to boost earnings starting next year and for sales of met coal this year to reach 11 million tons. The combined company will seek to expand production to more than 14 million tons per year over the next three years.

The acquisition, which amounts to $14.60 per share, has been approved by the boards of both companies. Shareholders that control 17 percent of International's stock have agreed to the deal, which must still be approved by regulators.

Last week, Arch Coal reported that it returned to a profit in the first quarter as higher coal prices offset a decline in sales.

The St. Louis company also raised its 2011 earnings prediction on the expected jump in global demand for coal used both to make steel and produce electricity.

It expects 2011 total sales of between 155 million tons to 160 million tons.

International Coal Group Inc. is based in Scott Depot, W.V. It produces coal in 13 mining complexes throughout Northern and Central Appalachia and Illinois.

Shares of ICG which closed at $11.03 Friday, jumped 31 percent to $14.42 before the market opened Monday.

Arch Coal shares lost about 2.3 percent, or 80 cents, to hit $33.50 in premarket trading. That's still closer to its 52-week high of $36.99, than its low over the past year of just over $19 per share.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
1Like our page
2Share
Companies
Arch Coal will buy rival International Coal Group in an all-cash deal valued at $3.4 billion, the companies said Monday. The new company will form the nation's second largest supplier of metallurgical coal, which is used to make steel, the companies said. Met coal is in...
Arch Coal,International Coal Group
290
2011-33-02
Monday, 02 May 2011 12:33 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved