Tampa, Florida-based hard coking coal producer and exporter, Walter Energy, Inc., has offered to buy Vancouver, British Columbia-based metallurgical coal producer Western Coal for C$3.3 billion (US$3.2 billion) to increase Walter Energy's access to the coal.
Walter Energy's proposal is subject to due diligence and negotiation of definitive agreements. During the due diligence period, Western Coal has agreed to work exclusively with Walter Energy for a period of up to 14 days expiring December 1, 2010. If a definitive agreement is not reached, no penalties will be incurred by either party.
Western Coal expects to produce 6.1 million metric tons (mt) of coal for the fiscal year ending March 31, 2011, growing to 10 million mt for fiscal 2013 while Walter Energy has stated that it expects to produce 6.6 million mt of coal in the calendar year 2010, growing to 8.6 million mt in the calendar year 2012.