Alpha Natural Resources completes acquisition of Massey Energy
- June 1, 2011
Alpha Natural Resources Inc. of Abingdon has acquired Massey Energy Co. Richmond-based Massey has been beleaguered by the fallout of an explosion last year at a West Virginia mine that killed 29 miners.
The $7.1 billion merger was approved by shareholders of both companies Wednesday. The new company is the world’s third largest producer of metallurgical coal, the in-demand coal used to make steel.
The deal means Alpha will control the second-largest coal reserve in the U.S., with 5 billion tons of coal in Central and Northern Appalachia, Illinois and the Powder River Basin. The company has about 150 coal mines and 40 preparation plants and employs 14,000 people. Revenues of the combined company would have been almost $7 billion in 2010.
But Alpha also inherits Massey’s issues related to the disaster at the Upper Big Branch mine. Massey had reached settlements with some of the victims’ families and faced lawsuits from 13 families. The future of those lawsuits is unclear. Alpha officials have said they are planning to improve safety and environmental stewardship at the newly acquired mines.
“We will immediately begin building upon our history of successful integrations, including implementing Alpha’s unique employee-driven “running right” philosophy of safety and environmental stewardship across the businesses,” Kevin Crutchfield, Alpha’s CEO said in a statement. “With this acquisition, Alpha is well-positioned to capitalize on strong global demand growth for both thermal and metallurgical coals, while delivering excellent quality and service to our domestic customers.”
Under the acquisition, Massey stockholders received 1.025 shares of common stock of Alpha and $10 for each share of Massey stock they owned. Massey shareholders now own 46 percent of the combined company.