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Australia-Based Coronado, Peabody Terminate Potential $6B Combination Discussions

  • Australia-based Coronado Global Resources Inc (OTC: CODQL) has jointly agreed with Peabody Energy Corp (NYSE: BTU) to cease discussions regarding a potential combination of the two companies.

  • A month back, Coronado Global Resources and Peabody Energy confirmed merger discussions worth $6 billion.

  • Neither company gave a reason for the failure of the talks or disclosed the financial terms.

  • Coronado continues to pursue and implement its existing capital management plans and remains focussed on its existing capital investments and long-term development strategy.

  • During the COVID-19 pandemic, Peabody warned that it might enter bankruptcy protection for a second time, given the weakness in coal markets after the pandemic led to a sharp drop in power demand as factories closed or reduced output.

  • But the tie-up was seen as an indicator of how the coal-price surge that followed Russia’s invasion of Ukraine is transforming the sector’s fortunes, Wall Street Journal reported.

  • Several coal miners have seen their cash piles grow, enabling them to eliminate debt, sweeten returns to shareholders or consider acquisitions.

  • The report added that this is the second time in 2022 that Coronado has held fruitless talks with a U.S. coal mining company. In May, it disclosed discussions with Arch Resources Inc (NYSE: ARCH) but couldn’t reach an agreement.

  • Price Action: BTU shares are up 6.08% at $28.63 during the premarket session on the last check Monday.

  • Photo Via Company

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