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ArcelorMittal Accepts PEAMCoal Offer
10/26/2011 - ArcelorMittal provided notice to Peabody Energy that following its acceptance of PEAMCoal Pty Ltd.’s offer for Macarthur Coal Ltd., it has terminated the Co-Operation and Contribution Agreement between the two companies. ArcelorMittal will remain a shareholder in PEAMCoal until the termination arrangements are completed in approximately 90 days.
ArcelorMittal provided notice to Peabody Energy that, in accordance with the Co-Operation and Contribution Agreement between the two companies, following its acceptance of PEAMCoal Pty Ltd.’s offer for Macarthur Coal Ltd., it has terminated the Co-Operation and Contribution Agreement. ArcelorMittal will remain a shareholder in PEAMCoal until the termination arrangements are completed, which is expected in approximately 90 days.
ArcelorMittal has determined that it would no longer be appropriate to allocate substantial capital to the acquisition of a non-controlling, minority business interest. This is in accordance with the rights that ArcelorMittal originally negotiated with Peabody at the time the Co-Operation and Contribution Agreement was concluded.
Given the unanticipated level of acceptances into the offer, ArcelorMittal believes that it is more appropriate to focus its capital elsewhere in its business. It considers the capital commitment that would be required to retain its Macarthur interest and grow it further exceeds what is appropriate to allocate to a business that ArcelorMittal does not fully control and consolidate.
The unconditional PEAMCoal offer for Macarthur will not be affected by ArcelorMittal’s acceptance and will remain open until November 11 unless extended. ArcelorMittal will continue to perform its funding obligations to PEAMCoal until the termination takes effect.
ArcelorMittal is the world’s leading integrated steel and mining company, with operations in more than 60 countries. In 2010, the company had revenues of US$78 billion and crude steel production of 90.6 million tonnes, representing approximately 6% of world steel output. Its mining operations produced 47 million tonnes of iron ore and 7 million tonnes of metallurgical coal as well in 2010.
