ArcelorMittal, Peabody bid for Macarthur coal: firms

11th July 2011, Comments 0 comments

Steelmaking giant ArcelorMittal has teamed up with a US mining company to seize control of Macarthur Coal in Australia, in a global battle to assure coal resources, statements said on Monday.

ArcelorMittal, by far the biggest steelmaker in the world, and Peabody Energy are bidding for all of the shares in Macarthur, valuing the company 4.7 billion Australian dollars (3.5 billion euros, $5 billion).

The two bidders are making the bid via a joint company, with Peabody owning 60 percent and ArcelorMittal owning 40 percent.

This latest bid for Macarthur is priced at 15.50 Australian dollars per share, excluding the end-of-year dividend. Macarthur shares closed at 11.08 Australian dollars in Sydney on Monday.

ArcelorMittal is already the second-biggest shareholder in Macarthur with 16 percent of the shares, behind Citic, a Chinese investment fund, which owns 24.3 percent. South Korean steel-maker Posco owns seven percent.

High demand for raw materials from emerging markets is focusing interest in natural resrouces. In addition coal is essential to the energy and steel industries. Both factors have put mining companies in the spotlight.

ArcelorMittal has been trying for some time to secure upstream coal resources, but Chinese interest in all of these areas, including coal, is strong.

Queensland-based Macarthur is the world's top producer of pulverised coals used to make steel.

The company operates two mining sites and intends to double capacity by 2014 with two other sites. The firm employs 445 people.

As prices for pulverised coal hit record high levels, Macarthur fended off an earlier bid by Peabody and another takeover offer by Australian group New Hope.

The joint offer by ArcelorMittal and Peabody for Macarthur is much higher than the unsuccessful Peabody offer in 2010.

Peabondy had first offered 4.07 billion Australian dollars but then reduced the offer to 3.8 billion Australian dollars after the Australian government passed a controversial carbon tax.

Macarthur said in a statement it "will seek to engage with Peabody and ArcelorMittal in relation to price and terms."

ArcelorMittal said that, with Peabody, it looked "forward to engaging with the board of Macarthur" in regards to the proposal.

In Mongolia recently, Peabody beat ArecelorMittal for a joint project with Chinese company Shenhua to develop one of the biggest unused coal reserves in the world, the giant Tavan Tolgoi project in the Gobi desert.

© 2011 AFP

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