Alpha Natural reaches $7.1B deal for Massey Energy

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Source: Associated Press

Massey Energy Co., struggling with losses after an explosion that killed 29 workers at a West Virginia coal mine, agreed Saturday to be taken over by Alpha Natural Resources Inc.

Alpha is paying $7.1 billion in cash and stock for the company, the nation's fourth-largest coal producer by revenue. Massey operates 19 mining complexes in Virginia, West Virginia and Kentucky including the Upper Big Branch mine where the April 5 disaster occurred.

Alpha is offering 1.025 share of its stock for each share of Massey, plus $10 per share in cash. Together, that represents a bid of $69.33 per share, a 21 percent premium over Massey's closing share price Friday.

In an interview, Alpha CEO Kevin Crutchfield said the acquisition will offer greater access to international markets. Shortages of coal for making steel have driven up prices around the world, a trend Alpha hopes to capitalize on.

Read more: http://news.yahoo.com/s/ap/20110129/ap_on_bi_ge/us_alpha_natural_massey_energy