A long-awaited deal for miner Anglo American (AAL.L) to sell its Australian coal assets to a consortium headed by private equity group Apollo Global Management (APO.N) is off, two sources with knowledge of the matter said on Tuesday.
Three sources said in October the deal was expected, although one had said finalizing the agreement could still take weeks as a more than 200 percent surge in the coking coal market this year complicated agreeing a price.
One of the sources told Reuters the Anglo American board had voted down the deal that valued the assets at more than $2 billion. The proposed deal had been part cash and partly based on a mechanism to lock in any future price rises.
A spokesman for Anglo American declined to comment.
Asked about the deal last week, Anglo American CEO Mark Cutifani told Reuters the talks were very difficult as two highly experienced sets of negotiators held out for the price they considered fair.
Coking coal prices have surged as Chinese inventories have shrunk, although Cutifani has said he does not believe current levels are sustainable for the long term.
Anglo American said in February that discussions were under way to divest its Moranbah and Grosvenor coal mines in Queensland state as part of its plans to sell $3-4 billion of assets this year.
This year’s commodity rally has greatly reduced the pressure on Anglo American to sell its assets, although Anglo American has said its strategy is for now unchanged.
(Additional reporting by Barbara Lewis in London; Editing by Alexander Smith)