ArcelorMittal has suddenly pulled out from the joint venture with Peabody Energy, just a day after the JV secured a majority stake in Australia's Macarthur Coal, the world's biggest producer of steel making coal.
The announcement, which surprised the market, comes after the companies secured a majority 59.85-per cent stake in the Queensland focused coal miner and also ended a three-month struggle to take control of Macarthur. (See: Peabody, ArcelorMittal acquire majority stake in Macarthur Coal)
Peabody and ArcelorMittal, under the PEAMCoal 60:40 JV, had made a formal A$15.50 a share takeover offer for the Brisbane-based miner on 1 August, after Macarthur refused to back the initial offer made on 11 July.
After rejecting the bid, PEAMCoal sweetened the offer to A$16 per share and agreed to pay A$16.25 per share if 90 per cent threshold is reached, taking the takeover value from $5 billion to about $5.3 billion.
After securing a majority stake, Aditya Mittal, ArcelorMittal's chief financial officer, yesterday encouraged the remaining Macarthur shareholders to accept the offer without delay and improve their chances of receiving the premium A$16.25 per share price.
Twenty-four hours later, the Luxemburg-based steelmaker, without giving any reason for pulling out of the deal, said in a statement, "ArcelorMittal believes that it is more appropriate to focus its capital elsewhere in its business."