The Missouri-based company said Wednesday ICG was now a wholly owned subsidiary. The two initially announced the deal earlier this year.
In its expanded form, Arch expects 2011 pro forma metallurgical sales of 11 million tons and expects, via expansions, to boost met output to almost 15Mt by 2015 to meet market demand across the world.
The takeover of the former Appalachians-focused ICG also adds almost 13Mt of Appalachian thermal production to Arch's domestic portfolio, solidifying its position as the number two producer among US-based coal miners. It also creates the industry’s most diversified producer.
Arch said it expected to leverage its dedicated throughput capacity, logistics capabilities and strategic relationships to further participate in global growth markets by expanding its export shipments via the both US coasts and the Gulf of Mexico.
"This acquisition extends Arch's reach into every major US coal supply basin, enhances our low-cost and leadership position in core operating regions and creates a world-class global thermal and metallurgical coal franchise poised for growth," Arch chairman and chief executive officer Steven Leer said.
"With the addition of ICG, Arch will possess one of the industry's most geographically diverse and strategically balanced operating profiles – with EBITDA nearly evenly split between eastern and western regions and between metallurgical and thermal markets. The combined entity will also provide a powerful foundation upon which to build out metallurgical and thermal volumes geared towards serving the domestic and international coal trade."
Arch is now the second largest US reserve holder; the acquisition gave the company a 25% boost in its reserve base to 5.5 billion tons (pro forma as of December 31, 2010).
The company estimates 431Mt of that is characterized as metallurgical quality comprised of low-volatile coal, high volatile A and B coals and pulverized injection coal, meaning it owns the most extensive, highest quality met coal reserve bases in US coal.
"We believe this acquisition - the largest in company history - offers a compelling value proposition for our employees, our customers and our investors," Leer said.
"The combined company will serve a broad mix of power producers, steelmakers and industrial accounts here and around the world – offering a vast metallurgical and thermal coal product slate and a wide range of logistical options for delivery."
Post-integration of ICG’s assets into the Arch portfolio, the producer will operate 24 mining complexes across five US coal supply basins, with planned 2011 coal sales of 171 to 176Mt.
Arch will also now employ a total of 7,400 people. Revenues for 2011 are projected to be more than $5 billion.
"We expect to integrate ICG quickly over the next three to six months and should fully realize the target synergies in the first full year of operation," Arch president and CEO John Eaves said Wednesday morning.
"In fact, we have begun executing on our integration plans, which center on improving the combined company's cost structure, exceeding the forecasted synergies and accelerating metallurgical coal development projects."
The company estimates the transaction will create synergies of $70 million to $80 million annually, beginning next year.
