Coal miner Massey merges with rival



NEW YORK (CNNMoney) -- Massey Energy, owner of the Upper Big Branch mine in West Virginia that was the site of a tragic explosion last April, was acquired by rival Alpha Natural Resources in a $7.1 billion deal, the companies announced Saturday.

Alpha (ANR), headquartered in Abingdon, Va., paid $69 a share, 21% more than Massey's current stock price. Including debt, the transaction is valued at $8.5 billion.

Last year's accident at Upper Big Branch caused the deaths of 29 miners and raised serious questions about mine safety issues at Richmond, Va.-based Massey (MEE). The company's stock price was more than cut in half from early April through early July of last year.

The federal government has alleged that excessive coal dust in the mine, caused by poor equipment maintenance, was the cause of the explosion. Massey has refuted that argument, however.

But shares surged toward the end of 2010 on speculation that the company would be acquired. Massey's stock, which rose 5% Friday, are now slightly higher than where they were the day of the accident. Steel company ArcelorMittal (MT) and Arch Coal (ACI) were mentioned, in addition to Alpha, in merger rumors.

Takeover chatter intensified after CEO Don Blankenship announced in December that he was retiring. But as recently as late last month, Massey was also said to be interested in buying smaller competitor International Coal Group (ICO) instead of being taken over itself.

The deal between Alpha and Massey combines the third and fourth largest coal producers in the United States. Together, the companies have 110 mines with 5 billion tons of coal reserves.

Massey, which will report its fourth-quarter results on Feb. 1, is expected to post a loss. Sales, however, are forecast to rise 28%.

Demand for coal is expected to remain high in 2011 because of strong economic growth in China, India and other emerging markets. But Peabody Energy (BTU, Fortune 500), the largest coal company in the United States, indicated when it reported earnings last week that there were concerns about supply issues as a result of floods in Australia. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Sponsors

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.