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Whitehaven Coal has acquired Nathan Tinkler’s Aston Resources in a “friendly” deal for $2.25 billion to form Australia’s largest coal company.
Whitehaven and Aston are fellow mid-tier miners and close neighbours in the Gunnedah Basin, and the combined entity is now pushing to quadruple production.
New Hope now sits second behind Whitehaven-Aston, with a market capitalisation of $4.82 billion compared to the newly merged company’s $5.14 billion.
Whitehaven offered 1.89 of its shares for each Aston share, valuing Aston at $11 a share, a 13 per cent premium on Friday’s closing price.
Tinkler is Aston’s part owner, founder, and chairman, and in buying the company Whitehaven will also acquire Boardwalk Resources, which is partly owned by Tinkler.
The deal is the latest in a spate of consolidation in Australia’s coal sector this year, adding to Peabody Energy’s acquisition of Macarthur Coal last month for $4.9bn.
While Whitehaven is currently primarily a thermal coal producer, with a production split of 75 per cent thermal and 25 per cent metallurgical, the merger will help the company realign its strategy.
Whitehaven is targeting a move to equal thermal/metallurgical coal production after 2015, and Aston’s profile is currently 84 per cent metallurgical and 16 per cent thermal.
Aston is currently a developer and is not selling coal on the market.