Merger will create third largest US coal producer

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Alpha Natural Resources and Foundation Coal Holdings announced today that they have signed a definitive agreement under which the two companies will merge in an all-stock transaction valued at $2 billion, creating America's third largest coal producer.   Alpha and Foundation together operate 59 coal mines and 14 preparation plants. According to the companiesÔÇÖ joint statement, the combined company will have one of the most expansive geographic footprints in the industry, reserves of more than 2.3 billion tons of coal, and an attractive growth profile.   Alpha is a leading Eastern coal producer and the nation's largest supplier of metallurgical coal to the steel industry, operating 50 mines and 10 coal preparation plants in four states.   Foundation is a diversified producer of thermal coal used by electric utilities, with nine active mines, four preparation plants and coal reserves in Northern Appalachia, the Powder River Basin and Central Appalachia as well as reserves in the Illinois Basin.   Under the terms of the definitive merger agreement, Foundation stockholders will receive 1.084 shares of the new company for each share of Foundation, and each share of Alpha will automatically become one share of the combined company.   "We're creating a true US leader in the energy sector with balance, size and scale," said Michael Quillen, chairman and CEO of Alpha. "Combining our resources and experience puts us in an excellent position to compete in both domestic and international coal markets, using a diverse array of production sources and marketing channels.   James Roberts, chairman and CEO of Foundation, commented: "With one of the industry's strongest balance sheets and credit profiles, our new company will be well situated to invest in our future growth, which presents additional prospects for our stockholders and our employees. We look forward to working with Alpha to realize the many anticipated benefits of this combination."   The combined company expects to realize approximately $45 million in annual revenue and cost savings through administrative, sales and operating synergies beginning in 2010.   Upon completion of the merger, Alpha's Quillen will become chairman of the combined company. Kevin Crutchfield, currently Alpha's president, will become chief executive officer, and Kurt Kost, Foundation's president and chief operating officer, will become president of the combined company.   James Roberts from Foundation will become a member of the combined company's board of directors, which will consist of six directors from Alpha and four directors from Foundation.   The combined company will retain the Alpha name and will be headquartered in Abingdon, Virginia.   The merger is subject to the approval of each company's stockholders and other customary closing conditions including regulatory approvals. The transaction is expected to be completed later this year.       *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *