Peabody Energy and ArcelorMittal SA Submit Proposal to Acquire Macarthur Coal

By Peabody Energy, PRNE
Sunday, July 10, 2011

ST. LOUIS, July 11, 2011 -

Peabody Energy (NYSE: BTU) and ArcelorMittal SA (NYSE: MT) today
confirmed that they have jointly submitted an indicative proposal
to the board of directors of Macarthur Coal Ltd. (ASX: MCC) to
acquire all of the shares of the company.

Under the proposal by a newly formed company, owned 60 percent
by Peabody and 40 percent by ArcelorMittal, Macarthur shareholders
would be offered a cash price of A$15.50 per share through an
off-market takeover offer.  The new company has a relevant
interest of approximately 16 percent in Macarthur’s shares.

The proposal price implies a value for the equity in Macarthur
of approximately A$4.7 billion and represents a substantial premium
to recent trading.

The proposal to Macarthur’s board is non-binding and conditional
on the successful completion of due diligence, which would be
completed in a timely manner. Any resulting offer to Macarthur
shareholders would be subject only to minimum 50.01 percent
acceptance, Australia’s Foreign Investment Review Board approval
and other customary conditions and approvals.  

According to Peabody Chairman and Chief Executive Officer Greg
, “We believe there is significant value that can be created
by managing Macarthur’s portfolio of coal assets using Peabody’s
industry-leading operating, development and commercial skills. We
look forward to advancing this proposal to complete a transaction
for the benefit of Macarthur shareholders.”

Aditya Mittal, Chief Financial Officer and Member of the Group
Management Board of ArcelorMittal, said: “ArcelorMittal has been a
long-term investor in Macarthur, and we look forward to discussing
our proposal with the board of Macarthur.”

Macarthur is the world’s largest producer of seaborne low
volatile pulverized coal injection (LV PCI) coal with production
and development assets in the Bowen Basin, Australia, including the
Coppabella and Moorvale Joint Venture and Middlemount Mine.
 It controls total coal reserves of approximately 270 million
tonnes (approximately 175 million tonnes on an attributable basis)
and total resources of approximately 2.3 billion tonnes
(approximately 1.7 billion tonnes on an attributable basis).
 It has current production guidance of 3.8 to 4.0 million
tonnes for the year ended June 30, 2011.

Peabody is the world’s largest private-sector coal company and a
global leader in clean coal solutions. With 2010 sales of 246
million tons and nearly US$7 billion in revenues, Peabody fuels 10
percent of U.S. power and 2 percent of worldwide electricity.

ArcelorMittal is the world’s leading integrated steel and mining
company, with operations in more than 60 countries.  In 2010,
ArcelorMittal had revenues of US$78 billion and crude steel
production of 90.6 million tonnes, representing approximately 8
percent of world steel output.  ArcelorMittal’s mining
operations produced 47 million tonnes of iron ore and 7 million
tonnes of metallurgical coal as well in 2010.

Peabody has engaged UBS and Bank of America Merrill Lynch as its
financial advisers and Freehills as its legal adviser in relation
to the potential transaction.  ArcelorMittal has engaged RBC
Capital Markets as its financial adviser and Mallesons Stephen
Jaques as its legal adviser in relation to the potential

Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on numerous assumptions
that Peabody believes are reasonable, but they are open to a wide
range of uncertainties and business risks that may cause actual
results to differ materially from expectations. These factors are
difficult to accurately predict and may be beyond the company’s
control. The company does not undertake to update its
forward-looking statements. Factors that could affect results
include those described in this press release as well as risks
detailed in the company’s reports filed with the Securities and
Exchange Commission.

Nothing in this announcement constitutes or is intended to
constitute a proposal to make a takeover bid for Macarthur Coal
Limited. There is no assurance that any such takeover bid will be

Macarthur reserves and resources and other information are based
on public disclosures and exclude the MDL162 tenement.

Vic Svec


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