Alpha Natural Resources (ANR) and Foundation Coal (FCL) To Merge Creating World's 3rd Largest Coal Producer

May 12, 2009 6:51 AM EDT

Alpha Natural Resources, Inc. (NYSE: ANR) and Foundation Coal Holdings, Inc. (NYSE: FCL) signed a definitive agreement under which the two companies will merge in an all-stock transaction, creating one of America's foremost coal producers.

Under the terms of the definitive merger agreement, Foundation stockholders will receive 1.084 shares of the new company for each share of Foundation, and each share of Alpha will automatically become one share of the combined company. Based on the closing price of Alpha on May 8, 2009, consideration received by Foundation stockholders was valued at $32.73 per share. This will result in Foundation stockholders owning approximately 41 percent and Alpha stockholders owning approximately 59 percent of the new company on a fully diluted basis.

The combined company would have an equity market capitalization of $3.5 billion and enterprise value of $4.0 billion as of today's announcement.

The combined company will be the third-largest coal producer in the U.S., with 2008 pro forma revenues of $4.2 billion.

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