ST. LOUIS, Feb. 26, 2020 /PRNewswire/ -- Emphasizing
that the case for combining assets has only grown stronger in
recent months, Peabody (NYSE: BTU) and Arch Coal (NYSE: ARCH) today
announced that they intend to continue to pursue creation of a
joint venture to strengthen coal's competitiveness with other
energy sources and create substantial value for multiple
stakeholders. The announcement follows a negative split decision by
the U.S. Federal Trade Commission (FTC) that advances the process
to the legal system.
"The proposed joint venture offers a clear and compelling path
to strengthen both our and our customers' ability to compete in
today's marketplace with electricity produced from coal," said
Peabody President and Chief Executive Officer Glenn Kellow. "We have provided tremendous
amounts of evidence to the FTC during an extensive review, fully
demonstrating that coal, including Southern Powder River Basin
coal, faces intense competition from natural gas and other
alternate fuels. We believe that the commission has reached an
incorrect decision that should be rapidly remedied within the court
system to allow customers and others to benefit from the
combination."
"We view the need for this combination as self-evident," said
John W. Eaves, Arch's Chief
Executive Officer. "The proposed joint venture promises to
enhance the cost-competitiveness of our thermal operations, enable
us to serve the evolving needs of domestic power generators well
into the future, and protect the value of our thermal assets for
our shareholders. In short, it will create a stable, durable
supply platform for our thermal customers even as we continue our
organizational pivot towards global metallurgical markets."
Peabody and Arch intend to litigate the FTC's decision within
the U.S. federal court system over the coming months.
Both companies believe the FTC has incorrectly defined the market,
and fails to reflect the true competitive nature of the current
U.S. energy landscape.
The transaction was announced in June
2019 and would combine the companies' Powder River Basin and
Colorado assets. Ownership
of the joint venture would be structured with Peabody owning 66.5
percent and Arch owning 33.5 percent. If consummated, the
joint venture is expected to realize annual synergies of
$120 million over an initial 10-year
period, which would benefit all stakeholders, including customers,
local communities, employees, investors and multiple
others.
The transaction includes seven of the companies' mines,
including Peabody's North Antelope Rochelle Mine (NARM) and Arch's
Black Thunder Mine, which share a property line of more than seven
miles. Additional assets include the Caballo, Rawhide and
Coal Creek mines in Wyoming along with the West Elk and Twentymile
mines in Colorado.
Peabody is the leading global pure-play coal company and a
member of the Fortune 500, serving power and steel customers in
more than 25 countries on six continents. The company offers
significant scale, high-quality assets, and diversity in geography
and products. Peabody is guided by seven core values: safety,
customer focus, leadership, people, excellence, integrity and
sustainability. For further information, visit
www.PeabodyEnergy.com.
U.S.-based Arch Coal, Inc. is a top coal producer for the global
steel and power generation industries. Arch operates a
streamlined portfolio of large-scale, low-cost mining complexes
that produce high-quality metallurgical coals in Appalachia and
low-emitting thermal coals in the Powder River Basin and other
strategic supply regions. For more information, visit
www.ArchCoal.com.
Contact:
Peabody
314.342.4351
Arch Coal
314.994.2897
Peabody Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the securities laws. Forward-looking statements can
be identified by the fact that they do not relate strictly to
historical or current facts. They often include words or variation
of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "projects," "forecasts,"
"targets," "would," "will," "should," "goal," "could" or "may" or
other similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events or results. All statements that address
operating performance, events or developments that Peabody or Arch
expect or anticipate will occur in the future are forward-looking
statements. They may include estimates of value accretion, joint
venture synergies, closing of the joint venture, revenues, income,
earnings per share, cost savings, capital expenditures, dividends,
share repurchases, liquidity, capital structure, market share,
industry volume, or other financial items, descriptions of
management's plans or objectives for future operations, or
descriptions of assumptions underlying any of the above. All
forward-looking statements speak only as of the date they are made
and reflect Peabody's and Arch's good faith beliefs, assumptions
and expectations, but they are not guarantees of future performance
or events. Furthermore, each Peabody and Arch disclaim any
obligation to publicly update or revise any forward-looking
statement, except as required by law. By their nature,
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
suggested by the forward-looking statements. Factors that might
cause such differences include, but are not limited to, a variety
of economic, competitive and regulatory factors, many of which are
beyond the Peabody's and Arch's control, including (i) risks that
the proposed joint venture may not be completed, including as a
result of a failure to obtain required regulatory approvals, (ii)
risks that the anticipated synergies from the proposed joint
venture may not be fully realized, including as a result of actions
necessary to obtain regulatory approvals, (iii) other factors that
are described in Peabody's Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2019, (iv)
other factors that are described in Arch's Annual Report on Form
10-K for the fiscal year ended Dec. 31,
2019 and (v) other factors that Peabody or Arch may describe
from time to time in other filings with the SEC. You may get
such filings for free at Peabody's website at www.peabodyenergy.com
and Arch's website at www.archcoal.com. You should understand
that it is not possible to predict or identify all such factors
and, consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
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SOURCE Peabody