Walter-Western deal complete

WALTER Energy has completed its $US3.2 billion acquisition of Canadian producer Western Coal.
Walter-Western deal complete Walter-Western deal complete Walter-Western deal complete Walter-Western deal complete Walter-Western deal complete

Courtesy Western Coal

Donna Schmidt

Walter will pay $C11.50 per share in cash, or 0.114 of a Walter common share; that is a 56% premium to Western Coal's closing price on November 17, the day before the announcement of the takeover.

"The combined company has an unrivaled growth profile in the industry, which ensures we are well positioned to meet the world's growing demand for our high-quality metallurgical coal products," Western president and chief executive officer Keith Calder said.

Calder is the incoming CEO of Walter Energy.

"We have truly transformed Walter Energy once again," added Walter chairman Michael Tokarz.

"We are delivering on our promise to grow our coking coal enterprise by reinvesting in our business and deploying our strong free cash flows in thoughtful, creative and strategic ways to enhance shareholder value."

Western common shares will be de-listed from the Toronto Stock Exchange and the Alternative Investment Market this week. Walter's common shares, traded on the New York Stock Exchange, have been conditionally approved for a TSX listing and should begin trading on or about April 7.

While neither company commented on the deal Friday, the Birmingham Business Journal Report in Alabama reported late last week that Walter will decide post-acquisition whether it will move its headquarters to Birmingham or Canada.

Walter initially announced in 2009 that it would move to the Alabama capital city. While it did open an office in the Hoover suburb, no executives are currently based there.

The newly combined company is a North American and global steelmaking coal giant, the top publicly traded pure-play metallurgical coal producer in the world with access to the Pacific and Atlantic seaborne markets.

In total, the producer now owns 385 million tons of reserves, 20Mt or more of which it expects to mine annually by 2012.

Its production profile is balanced between Walter's high-productivity assets and Western Coal's high-growth assets in Canada, the US and the UK, and it will be the only producer with cost-advantaged transportation access to the Asian and South American seaborne metallurgical coal markets.

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