Alpha, Foundation complete merger

ONE of the largest US coal producers has now officially been formed with the completed merger of Alpha Natural Resources and Foundation Coal Holdings.

Donna Schmidt

Both companies’ stockholders approved the transaction at special meetings held Friday.

The new company will retain the Alpha Natural Resources name and become the third-largest producer in the US behind Arch Coal and Peabody Energy. It will also continue to trade as a public company on the New York Stock Exchange under ANR.

The combined Alpha holds more than 60 mines and 14 preparation facilities, controls more than 2.3 billion tons of reserves, and gains 2008 pro forma revenues of $US4.2 billion. It will have a very large foothold in the US coalfields, including Foundation’s expansive holdings in the Powder River Basin region.

Alpha said in May it would take on Foundation debt totalling $530 million and would utilise cash on hand to repay $233 million of its borrowings.

"With this merger, we have created a stronger, more diversified company with the balance, size and scale to compete successfully in today's market environment,” said Kevin Crutchfield, who, with the closure of the deal, now becomes ANR’s chief executive officer.

“Our combined production, demonstrated marketing expertise and vastly enhanced reserve base, as well as our strong balance sheet and credit profile, provide a tremendous foundation to invest in future growth for the benefit of all our stakeholders."

Previous Alpha chairman and chief executive officer Michael Quillen is now executive chairman of the combined company. Former Foundation president and chief operating officer Kurt Kost takes the seat of president and Foundation's chairman and chief executive James Roberts is now a member of the new company’s board of directors.

Foundation stockholders will receive 1.0840 shares of the combined company for each share of Foundation common stock they held as of the closing date. Each Alpha share owned will automatically convert to one share of the new company.

Alpha and Cliffs had commenced a $10 billion merger agreement last year but terminated it in November, citing the volatile market as well as other issues.


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