Peabody nixes $8.3B deal for Anglo American coal assets due to mine fire

[Coal falling from the moving belt conveyor into the big pile]
keni1/iStock via Getty Images

Peabody (NYSE:BTU [https://seekingalpha.com/symbol/BTU]) +7.4% pre-market Tuesday after saying it terminated [https://seekingalpha.com/pr/20204654-peabody-terminates-planned-acquisition-with-anglo-american] its $3.8B deal with Anglo American (OTCQX:AAUKF [https://seekingalpha.com/symbol/AAUKF]) (OTCQX:NGLOY [https://seekingalpha.com/symbol/NGLOY]) to buy steelmaking coal assets due to the fire earlier this year at Anglo's Moranbah North Mine in Australia.

The two companies failed to reach a revised agreement to cure the material adverse change that compensated Peabody for the material and long-term impacts of the fire on the most significant mine in the planned acquisition, Peabody (NYSE:BTU [https://seekingalpha.com/symbol/BTU]) President and CEO Jim Grech said.

The mine was previously targeted to produce 5.3M tons of saleable production in 2025, yet there is no timetable for the resumption of longwall production at forecasted volumes and costs, Peabody (BTU [https://seekingalpha.com/symbol/BTU]) said.

Peabody (BTU [https://seekingalpha.com/symbol/BTU]) said in May that the fire constituted a material adverse change that would give it reason to exit the deal, and last month said there was "no credible timetable" for when operations would resume; Anglo (OTCQX:AAUKF [https://seekingalpha.com/symbol/AAUKF]) (OTCQX:NGLOY [https://seekingalpha.com/symbol/NGLOY]), however, has said there is no mine or equipment damage and has disputed that the incident constituted a material adverse change.

The deal's collapse would be a major blow [https://www.bloomberg.com/news/articles/2025-08-19/peabody-to-pull-out-of-3-8-billion-deal-for-anglo-s-coal-assets] to Anglo (OTCQX:AAUKF [https://seekingalpha.com/symbol/AAUKF]) (OTCQX:NGLOY [https://seekingalpha.com/symbol/NGLOY]), which agreed in November to sell the coal assets in an attempt to simplify and shrink its business so it could focus on copper and iron ore.

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