WASHINGTON, May 13 (Reuters) - U.S. antitrust officials on Tuesday cleared a deal for Patriot Coal Corp PCX.N to acquire Magnum Coal Co, an Appalachian producer owned by several investment funds, including one controlled by Microsoft Corp MSFT.O founder Bill Gates.
The transaction was included in the U.S. Federal Trade Commission’s daily listing of deals cleared by antitrust officials.
Gates’ personal investment fund, Cascade Investment LLC, also owns stakes in coal-fired power plants in Texas and Minnesota.
Neither Cascade nor Patriot were immediately available for comment.
An April filing with the U.S. Securities and Exchange Commission showed Cascade owned nearly 5 million shares of privately held Magnum. Bigger stakes were held by two ArcLight Energy Partners funds, and smaller stakes were held by several Citigroup C.N funds and the Howard Hughes Medical Institute.
St. Louis-based Patriot Coal said in a statement that the deal still needed the approval of its stockholders and that the acquisition should be completed by mid-2008.
Magnum Coal, which has more than 600 million tons of proven and probable reserves in southern West Virginia, sold 18.4 million tons of coal last year.
Patriot said on April 2 that it would buy Magnum with about 11.9 million shares of newly issued common stock and assume debt of about $150 million. The acquisition price was about $709 million, based on that day’s closing price of Patriot shares.
Separately, Patriot on April 24 announced a joint venture to develop some reserves in the Central Appalachian Kanawha River region, saying that a 51 percent stake was held by an unidentified Charleston-area investor group. The joint venture is expected to reach an initial production level of at least 1 million tons of coal per year, according to the company.
Patriot was spun off from Peabody Energy Corp BTU.N last October. It is among the top five U.S. metallurgical coal suppliers. (Reporting by Julie Vorman and Matt Daily; Editing by Lisa Von Ahn)
Our Standards: The Thomson Reuters Trust Principles.