Cleveland-Cliffs Inc. (CLF), a top producer of iron ore pellets and supplier of metallurgical coal in North America, will buy Alpha Natural Resources Inc. (ANR) in an effort to bolster its coal reserves and exploit the soaring demand for steel among emerging markets worldwide.
Cleveland-Cliffs is paying $10 billion for Alpha Natural Resources, a company that specializes in mining thermal coal used in steel production, the company said on its website. The deal values Alpha at $128.12 per share, a 35% premium to its closing share price on Tuesday.
Alpha shareholders will receive 0.95 Cleveland-Cliffs shares and $22.23 in cash for each share they hold. Alpha shareholders will hold 40% of the resultant company.
“By combining our companies’ complementary operations and management capabilities,…