KEY POINTS
- Anglo American divests coal assets for $4.9 billion.
- Peabody pays $2.05 billion upfront cash.
- Transaction aligns with Anglo’s strategic portfolio shift.
Anglo American Plc has announced a transformative deal to sell its remaining steelmaking coal assets, unlocking up to $4.9 billion in total cash proceeds. The company has entered definitive agreements to sell its steelmaking coal portfolio in Australia to Peabody Energy for a consideration of up to $3.78 billion, supplementing the previously announced $1.1 billion sale of its Jellinbah interest.
The transaction aligns with Anglo American’s strategy to reshape its portfolio around high-value copper, premium iron ore and crop nutrients. This portfolio shift marks another significant milestone as the company pivots toward streamlined operations and a more focused investment strategy.
Transaction details
According to SENS update posted today, Peabody Energy will pay $2.05 billion in upfront cash at completion, along with deferred payments of $725 million. Additional contingent payments of up to $550 million are tied to pricing benchmarks, and $450 million is linked to the reopening of the Grosvenor mine. The deal includes Anglo American’s stakes in key assets such as the Moranbah North and Capcoal joint ventures, among others.
Completion of the sale is expected by Q3 2025, subject to regulatory and competition approvals. Peabody has committed a $75 million deposit, which Anglo American may retain under specific circumstances should the transaction fail to proceed.
Strategic shift towards resilience
CEO Duncan Wanblad emphasized that the divestment reflects Anglo American’s focus on building a world-class portfolio in core areas like copper and crop nutrients. The sale also bolsters the company’s balance sheet, enhancing its financial resilience. Anglo American aims to deliver $1 billion in cost savings, with an additional $800 million in pre-tax recurring benefits by the end of 2025.
The transaction follows a broader strategic transformation that includes the planned demerger of Anglo American Platinum by mid-2025 and the ongoing sale process for its nickel business. Wanblad noted that all these moves aim to create a simpler, more agile organization better aligned with market dynamics.
Peabody’s expansion
Jim Grech, CEO of Peabody Energy, welcomed the acquisition, highlighting the quality of Anglo American’s coal assets and their alignment with Peabody’s values of safety and sustainability. The deal positions Peabody to integrate the new operations seamlessly while maintaining strong ties with local communities and stakeholders.
Anglo American’s steelmaking coal divestment underscores its commitment to streamlining operations while maintaining balance sheet strength. With this landmark transaction, the company is poised to deliver long-term value for shareholders and focus on growth in premium sectors.
