A U.S. government agency is pushing to block a proposed joint venture of Peabody Energy and Arch Coal, arguing that the partnership between the country’s two largest coal companies – both headquartered in the St. Louis area – would be bad for consumers.
The Federal Trade Commission announced Wednesday that it had filed an administrative complaint challenging the proposal to combine some of the companies’ assets in powerhouse coal-producing regions of the American West, such as Wyoming’s Powder River Basin.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices,” Ian Conner, director of the FTC’s Bureau of Competition, said in a statement. “This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans.”
The coal companies said in a statement they intend to continue their pursuit of the joint venture, arguing customers actually stand to gain value from the arrangement.
“The proposed joint venture offers a clear and compelling path to strengthen both our and our customers’ ability to compete in today’s marketplace with electricity produced from coal,” said Peabody President and CEO Glenn Kellow. “We believe that the commission has reached an incorrect decision that should be rapidly remedied within the court system to allow customers and others to benefit from the combination.”