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

Author: Vandana Singh | November 07, 2022 09:55am

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.
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