Business and the Economy
Alpha Acquires Massey in $7 Billion Deal
Massey Energy is no more. A vote today by shareholders approved the coal company’s acquisition by Alpha Natural Resources. The $7.1 billion merger means Alpha now controls the second-largest coal reserves in the country. The company will also control more reserves of metallurgical coal, which is in demand overseas to make steel. The new Alpha Natural Resources will operate more than 180 coal mines and processing plants throughout Appalachia and Wyoming.
Bill Bissett is the president of the Kentucky Coal Association, which counts both Massey and Alpha among its members. Bissett says the merger makes sense.
“We don’t expect any real major production changes,” he said. “I’d also suggest that the footprint of the two companies is somewhat similar, which makes the merger a little bit more of a likelihood for both companies to join together.”
Massey Energy has been under regulatory scrutiny since the explosion last year at the company’s Upper Big Branch Mine in West Virginia. Twenty-nine miners died in the explosion, and an independent report released last month partially blamed the disaster on Massey’s lax safety culture. Shareholders raised concerns about the merger, citing Alpha’s plans to retain several key Massey executives who have been implicated in the explosion. According to NPR’s Howard Berkes, Alpha will not be hiring former Massey Chief Operating Officer Chris Adkins. Adkins was supposed to co-lead Alpha’s “Running Right” safety program, and was the most controversial of Alpha’s planned Massey hires.