Cleveland mining group to buy Alpha Natural Resources
- July 16, 2008
Cleveland-Cliffs Inc. has agreed to buy coal producer Abingdon-based Alpha Natural Resources for $10 billion in stock and cash.
Under the plan, each Alpha Natural investor will receive 0.95 of a share of Cleveland-Cliffs and $22.23 in cash for each share they own in company stock. The companies said the sale would offer Alpha Natural investors a 35 percent premium on the stock’s Tuesday closing price of $94.92.
Pending regulatory and shareholder approvals, the deal is expected to close by the end of the year. The new company will be renamed Cliff Natural Resources.
The new company will become one of the largest mining companies in the U.S., with a portfolio of nine iron ore facilities and more than 60 mines in North America, South America and Australia.
Joseph A. Carrabba, chairman, president and CEO of Cleveland-Cliffs will become CEO of the combined company. Michael Quillen, chairman and CEO of Alpha Natural, will become the company’s non-executive vice chairman.
“Together, Alpha and Cleveland-Cliffs will have the size, the management depth and the mining expertise to compete on the global stage as demand for raw materials continues to increase around the world,” says Quillen. “This transaction is financially compelling for Alpha’s stockholders, who will benefit from enhanced value today alongside growth opportunities in the future.”