Peabody Terminates Planned Acquisition with Anglo American

Rhea-AI Summary

Peabody (NYSE: BTU) has terminated its planned acquisition of Anglo American's steelmaking coal assets due to a material adverse change (MAC) following an ignition event at Anglo's Moranbah North Mine. The event, which occurred on March 31, has resulted in uncertain production timelines and $45 million monthly holding costs for Anglo American.

The termination comes as the companies failed to reach a revised agreement addressing the MAC's impact on the mine, which was previously expected to produce 5.3 million tons in 2025. Additionally, Peabody has cancelled the related sale of the Dawson Mine to PT Bukit Makmur Mandiri Utama.

Moving forward, Peabody outlined a four-pronged strategy focusing on safe operations, shareholder returns through buybacks (65-100% of Available Free Cash Flow), organic growth, and maintaining financial discipline.

Positive

• Company maintains strong position with growing exposure to seaborne metallurgical coal
• New 25-year premium hard coking coal Centurion Mine in portfolio
• Strategic commitment to return 65-100% of Available Free Cash Flow to shareholders
• Strong diversified portfolio including low-cost seaborne thermal coal and U.S. thermal coal operations

Negative

• Loss of significant growth opportunity through failed Anglo American acquisition
• Termination of related Dawson Mine sale agreement
• Potential opportunity costs and time spent on failed transaction

ST. LOUIS, Aug. 19, 2025 /PRNewswire/ -- Peabody (NYSE: BTU) announced today that it has terminated purchase agreements with Anglo American Plc due to a material adverse change (MAC, as defined under the purchase agreements) relating to Anglo's steelmaking coal assets. Peabody's decision to terminate the transaction comes nearly five months after an ignition event occurred at Anglo's Moranbah North Mine. The exact cause of the event remains unknown, with no definitive timeline to resuming sustainable longwall production.

"The two companies did not reach a revised agreement to cure the MAC that compensated Peabody for the material and long-term impacts of the MAC on the most significant mine in the planned acquisition," said Peabody President and Chief Executive Officer Jim Grech. "Peabody has chosen to terminate the transaction and will continue to execute our plans to create substantial value from our diversified global asset portfolio."

Prior to the March 31 event, the acquisition had been scheduled to close in April 2025. Anglo estimates $45 million per month of holding costs at Moranbah North. The mine was previously targeted to produce 5.3 million tons of saleable production in 2025, yet there is no timetable for the resumption of longwall production at forecasted volumes and costs.

Peabody has also terminated the agreement for the related sale of the Dawson Mine to PT Bukit Makmur Mandiri Utama.

"Peabody's portfolio is very well positioned, with growing exposure to seaborne metallurgical coal highlighted by our new 25-year premium hard coking coal Centurion Mine, a low-cost seaborne thermal coal platform, and a leading U.S. thermal coal position capitalizing on rising power generation demand," said Mr. Grech. "Moving forward, we intend to execute a four-pronged strategy for value creation."

Major pillars of that strategy include:

• Managing safe, productive, environmentally responsible operations
• Returning 65-100% of Available Free Cash Flow to shareholders primarily via share buybacks
• Leveraging Peabody's extensive asset portfolio to deliver organic growth
• Maintaining a resilient balance sheet and exercising strong capital discipline

Peabody is a leading coal producer, providing essential products for the production of affordable, reliable energy and steel. Our commitment to sustainability underpins everything we do and shapes our strategy for the future. For further information, visit PeabodyEnergy.com. 

CONTACT:
Vic Svec / Kala Finklang
ir@peabodyenergy.com

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SOURCE Peabody

FAQ

Why did Peabody (BTU) terminate the Anglo American acquisition?

Peabody terminated the acquisition due to a material adverse change (MAC) following an ignition event at Anglo's Moranbah North Mine, with no definitive timeline for resuming sustainable longwall production.

How much are the monthly holding costs at Anglo's Moranbah North Mine?

Anglo American estimates $45 million per month in holding costs at Moranbah North Mine.

What is Peabody's new shareholder return strategy after the terminated acquisition?

Peabody plans to return 65-100% of Available Free Cash Flow to shareholders primarily through share buybacks.

What was the expected 2025 production for Moranbah North Mine?

The mine was previously targeted to produce 5.3 million tons of saleable production in 2025.

What are the four main pillars of Peabody's new strategy?

Peabody's strategy includes: 1) Managing safe, responsible operations, 2) Returning 65-100% of Free Cash Flow to shareholders, 3) Leveraging assets for organic growth, and 4) Maintaining financial discipline.