A deal to purchase Abingdon coal miner Alpha Natural Resources has fallen through.
Cleveland-based Cliffs Natural Resources, an iron-ore pellet manufacturer, announced in July its board of directors had agreed to purchase Alpha for $8.3 billion. The deal would have made Cliffs the largest producer of metallurgical coal in North America.
Since then, the value of the deal had plunged to $2.7 billion amid global financial turmoil and falling demand for steel.
The companies reached a settlement that requires Cliffs to pay Alpha $70 million to terminate the contract and Alpha to drop a lawsuit filed against Cliffs for delaying a shareholder vote.
The companies said the deal ended because of the current macroeconomic turmoil, uncertainty in the steel industry, shareholder relations and the potential for litigation. Hedge fund Harbinger Capital Partners, Cliffs’ largest shareholder, opposed the deal, saying it was too risky.
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