Atlantic Richfield to Sell Domestic Coal Operations to Arch Coal

Atlantic Richfield, the parent company of Arco Alaska Inc., has announced that it will sell its domestic coal operations to St. Louis-based Arch Coal Inc. in a $1.14 billion deal. The acquisition will create the nation's second-largest coal producer, with annual revenues of nearly $2 billion and the ability to supply nearly 110 million tons of coal per year, roughly 10 percent of the nation's coal supply. The deal is expected to close before July and will see the two companies merge their Wyoming operations under the banner Arch Western Resources LLC.

Key Takeaways:

• The deal will create the nation's second-largest coal producer, with Arch Coal surpassing Peabody Coal as the largest US coal producer owned by a US company.
• The acquisition will see Arch Coal acquire Atlantic Richfield's coal operations in Colorado and Utah, as well as merge its Wyoming operations with Arch Coal.
• The deal is expected to close before July and will not result in layoffs, but may lead to some management-level redundancies.
• The merged company will have the ability to supply nearly 110 million tons of coal per year, roughly 10 percent of the nation's coal supply.
• The company will have a combined operations footprint in the western United States and the East, with a diverse portfolio of low-sulfur coal operations.
• The deal is a strategic move to meet growing demand from electric utilities and compete in a deregulated marketplace.
• The merged company will have operations that meet federal Clean Air Act regulations, which are scheduled to go into effect next year.

Statistics:

• $1.14 billion: The total value of the deal.
• 110 million tons per year: The combined coal supply of the merged company.
• 10%: The percentage of the nation's coal supply that the merged company will provide.
• $2 billion: Annual revenues of the merged company.
• 9 months: The time between Arch Coal's merger with Ashland Coal Inc. and the announcement of the deal with Atlantic Richfield.

Sources:

• The Associated Press Los Angeles
• Atlantic Richfield company announcement
• Arco Alaska Inc. company announcement