South 32 told the market that it had pulled out of the deal following concerns raised by the Australian Competition and Consumer Commission that the deal would reduce competition in the supply of metallurgical coal to Australian steelmakers.
“South32 has always maintained that metallurgical coal is a globally traded commodity,” South 32 said in its statement to the market.
“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 had struck an agreement in November to buy Peabody’s Metropolitan Colliery and an associated 17 per cent stake in the Port Kembla Coal Terminal, south of Sydney.