Industry Consolidation
Teck Cominco Snaps Up Fording
VIRGINIA GALT, Globe and Mail Update, July 29, 2008 at 9:53 AM EDT
Teck Cominco Ltd. announced Tuesday that it has reached a $14.1-billion (U.S.) deal to acquire 100 per cent of the assets of Fording Canadian Coal Trust, Canada's largest producer of metallurgical coal.
“Teck will pay approximately $12.4-billion in cash and issue approximately 36.9 million Teck Class B subordinate voting shares in consideration for the Fording assets,” Vancouver-based Teck said in a statement.
Fording Coal Trust said it made the deal with Teck after looking at other strategic alternatives and conducting “a global search for potential purchasers of Fording.”
Teck currently holds about 19.9 per cent of Fording's units and is the managing partner of the Elk Valley Coal Partnership, the metallurgical coal business from which Fording receives substantially all of its cash flow.
Teck said the cash portion of the deal will be primarily funded by a $9.8-billion loan arranged with a syndicate of banks.
Under the terms of the transaction, Fording unitholders will receive $82 in cash and 0.245 of a Teck Class B subordinate voting share per Fording unit.
I am not an investment adviser and as such I expect that you, in our communications, will do your own DD and not act on message board banter of any kind.
AI
