News: Gloucester confirms merger proposal

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Gloucester Coal Limited (ASX:GCL) has announced it has entered into a merger proposal deed with Yanzhou Coal Mining and its wholly owned subsidiary Yancoal Australia following an approach from the company.



The merged company will be 23 per cent owned by Gloucester shareholders, and 77 per cent by Yanzhou.



The deal values Gloucester at $2.1 billion. Gloucester shareholders will receive $3.20 a share, which includes a special dividend and capital reduction, and scrip worth 23 per cent of the combined entity.

For the 2011 financial year Gloucester Coal reported a net profit of $54.5 million.