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Peabody Energy is pulling out of its $3.8bn agreement to buy Anglo American’s coal mines over the unexpected closure of the deal’s flagship mine, in a major setback to Anglo’s restructuring programme.
The US coal producer said on Tuesday it was terminating the agreement with Anglo due to what it considered to be a “material adverse change” triggered by an explosion at the Moranbah North mine. The Australian site has remained closed since the incident in March.
Peabody and Anglo failed to agree on a “cure” for the so-called “material adverse change” during a 90-day discussion period that expired this month, Peabody chief executive Jim Grech said in a statement. “Peabody has chosen to terminate the agreement,” he added.
Anglo has maintained that the event did not constitute a material adverse change. It did not immediately respond to Peabody’s move.
The unilateral termination — likely now be subject to a lengthy arbitration process in London — is a blow to Anglo’s restructuring efforts, which it put in place last year as the company defended itself against BHP’s £39bn hostile takeover attempt.
This is a developing story
https://www.ft.com/content/6fdcb542-82a7-4aa7-adbc-43c6d91310c8
