18 April 2017
ACQUISITION OF THE METROPOLITAN COLLIERY WILL NOT PROCEED
South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) announces that the proposed acquisition of the Metropolitan Colliery and associated 16.67% interest in the Port Kembla Coal Terminal from an Australian subsidiary of Peabody Energy Corporation will not proceed.
On 23 February 2017, the ACCC issued a Statement of Issues, concerned that the proposed acquisition may substantially lessen competition in the supply of metallurgical coal to Australian steelmakers.
South32 has always maintained that metallurgical coal is a globally traded commodity. Given this, South32 is not prepared to make significant concessions in favour of Australian steelmakers that would likely be required to mitigate the competition concerns. To do so would be contrary to the global market in which metallurgical coal producers compete and would adversely affect the value proposition of the acquisition.
South32 Chief Executive Officer Graham Kerr said: "Our approach to acquisitions is always opportunistic and seen through the lens of creating value for our shareholders.
"To proceed with the acquisition, in light of the anticipated concessions, would have compromised the merits of the transaction and this is not something we are prepared to do."
About South32
South32 is a globally diversified mining and metals company with high quality operations in Australia, Southern Africa and South America. Our purpose is to make a difference by developing natural resources, improving people's lives now and for generations to come. We are trusted by our owners and partners to realise the potential of their resources. We have a simple strategy to maximise the potential of our assets and shareholder returns by optimising our existing operations, unlocking their potential and identifying new opportunities to compete for capital.
Further information
Further information on South32 can be found at www.south32.net.
JSE Sponsor: UBS South Africa (Pty) Ltd
18 April 2017
