ArcelorMittal pulls out of joint bid with Peabody Coal to buy Australia's Macarthur Coal, will sell its stake in JV to Peabody; Peabody to benefit from deal more quickly, company's chairman, CEO Gregory Boyce says
October 26, 2011
– Peabody Coal Corp.'s joint bid with ArcelorMittal to buy Australia's Macarthur Coal is now a solo play.
Steel maker Mittal announced Tuesday it was pulling out of the deal and will sell its stake in the joint venture to Peabody. Mittal is also a customer for Peabody's coking coal.
In a conference call with analysts, Peabody Chairman and CEO Gregory Boyce was asked about the impact of ArcelorMittal's decision and whether Peabody and Mittal were still on good terms.
Boyce said Peabody wanted to own more of Macarthur than the 60 percent envisioned under the joint venture with Mittal, which would have owned the other 40 percent in the $5 billion deal.
Boyce said that by going it alone, Peabody will benefit from the deal more quickly, although he didn't put any estimates on the benefits.
BOYCE: "It certainly simplifies the process that we had in place as part of that joint venture agreement with ArcelorMittal, so that in itself will accelerate and ease our ability to capture those synergies. Now it's a matter of the final ownership structure of Macarthur.
FOLLOW-UP: Are you and ArcelorMittal still on good terms?
BOYCE: "Oh absolutely. We had a great relationship -- still have a great relationship with ArcelorMittal ... from our perspective, they're a great customer and we look forward to having other opportunities to work with them."
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