Coal miners Whitehaven and Aston Resources have announced a $5.1 billion merger of equals, with Aston shareholders set to receive 1.89 Whitehaven shares for each Aston share, following distribution of a fully franked special dividend of $0.50 per share to existing Whitehaven shareholder

 

The transaction is due to be implemented via Aston Scheme of Arrangement  meeting, which is expected to be held in March 2012.

 

The merger will result in the independent coal company, with a pro forma market capitalisation of approximately A$5.1 billion.  Whitehaven will deliver its extensive Gunnedah Basin projects, while Aston will bring its Maules Creek project and other exploration-stage projects.

 

 “The Merged Entity will be a large and growing coal company providingshareholders with exposure to the best of all worlds – operating coal mines with low cost structures and strong cashflows," Mr Mark Vaile, the current Deputy Chairman of Aston and proposed Chairman of the Merged Entity, said.

 

The companies have proposed the following transaction rationale:

  • Substantial growth pipeline including ramp up of Narrabri, development of Maules Creek and Vickery and a suite of exploration assets
  • Creates a major supplier of semi-soft coking and PCI coals, with metallurgical coal production rising to up to 60% of saleable production by FY2016
  • Strategic port and rail infrastructure position which supports the Merged Entity’s production growth plan
  • Significant synergies resulting from the consolidation of Gunnedah Basin mining operations, coal blending and marketing opportunities, infrastructure optimisation and procurement benefits
  • Highly regarded Board and management team with extensive experience and
  • a track record of success in developing coal mines and infrastructure and enhancing shareholder valu