Rio Tinto shareholders have approved Yancoal Australia’s acquisition of its subsidiary, Coal & Allied Industries, which owns majority shares in the Hunter Valley, Mount Thorley and Warkworth coal mines.
Chinese owned Yancoal lodged a $US2.45 billion ($3.23 billion) offer for the Hunter Valley assets, which gained Foreign Investment Review Board (FIRB) approval in April 2017.
Last month, Glencore launched a higher bid for Coal & Allied, offering $US2.55 billion ($3.35 billion). This prompted Yancoal to increase its offer, adding $US240 million in royalty payments and an increased break free to its previous $US2.45 billion cash bid.
Rio then recommended its shareholders back Yancoal as a result of the improved bid.
The current shareholder approval means Rio can no longer consider competing proposals for Coal & Allied.
Yancoal chairman Xiyong Li said, “This is a very positive result for our business and we are pleased that the Rio Tinto shareholders have now endorsed our compelling transaction for the tier one Coal & Allied assets.”
“Rio’s support for the acquisition signals the next stage in our strategic growth.”
Yancoal aims to complete the acquisition by the third quarter of 2017.