Insight
Adaro and EMR diversify into Australian metallurgical coal with US$2.25 billion Kestrel acquisition
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
On 27 March, Adaro Energy and EMR Capital announced they had jointly agreed to purchase Rio Tinto's 80% interest in the Kestrel coking coal mine in Queensland for US$2.25 billion in cash. The total consideration payable by Adaro and EMR may rise up to US$2.81 billion should Mitsui decide to exit its 20% interest for up to US$563 million. In this insight, we assess the metrics of the deal and strategic rationale of all parties involved.
Table of contents
- Overview
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Deal summary
- Kestrel
- Deal analysis
- Strategic rationale, upside and risks
Tables and charts
This report includes the following images and tables:
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Deal summaryLocation mapSummary valuation
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Valuation metricsEconomic assumptionsAdaro and EMR's bid signals further recovery in deal-implied benchmark hard coking coal pricesAdaro pro-forma production profile - metallurgical coal (attributable)Seaborne metallurgical coal total cash cost curve 2018 (US$/tonne)Marketable reserves (1 July 2018)
What's included
This report contains:
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