Alpha Natural to buy Foundation Coal for $1.4B

[May 12, 2009]  ABINGDON, Va. (AP) -- Alpha Natural Resources says it will buy Foundation Coal Holdings for approximately $1.4 billion, creating one of the nation's largest coal producers.

The deal will form a combined company with 2008 pro forma revenue of $4.2 billion. Alpha and Foundation value the all-stock transaction at about $2 billion, including the assumption of $530 million of debt.

Foundation stockholders will receive 1.084 shares of the new company for each share held, or about $32.73 per share. That price is a premium of 41 percent over Foundation Coal's closing price Monday.

Alpha shareholders will own about 59 percent of the new business, which will keep the Alpha name.

Both boards approved the deal, which is targeted to close later this year.

[Associated Press]

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