US $5 bln mining deal hits limits of coal revival

Arch Resources

22/08/2024 13:00

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Robert Cyran
       NEW YORK, Aug 21 (Reuters Breakingviews) - Consol Energy
and Arch Resources are teaming up in a no-premium merger. Though
the combined group will dig up cost savings and have more cash
to buy back stock, shareholders gave the union a tepid
reception. The rock’s future is less dismal, but the investor
pool remains narrow.
    
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    CONTEXT NEWS 
    Arch Resources and Consol Energy said on Aug. 21 they had
agreed to merge in an all-stock agreement. Arch shareholders
will receive 1.326 Consol shares for each share they hold.
Investors in Arch will own 45% of the new company, and Consol
shareholders 55%. The new company will be called Core Natural
Resources.
    Jimmy Brock, chairman and chief executive of Consol will
become executive chairman of the board for new company. Paul
Lang, chief executive of Arch, will become CEO of the combined
company and a member of the board of directors.
    The new company will produce around 12 million tons per
annum of metallurgical coal and 25 million tons per annum of
high calorific value thermal coal.
    Shares in Arch were up 7% at $135.3 by late morning in New
York on Aug. 21. Consol shares were up 6%.

 (Editing by Peter Thal Larsen and Pranav Kiran)
 ((For previous columns by the author, Reuters customers can
click on  CYRAN/ 
robert.cyran@thomsonreuters.com))