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Teck Cominco to Buy Fording Assets

Simon Constable

Zinc giant Teck Cominco(TCK Quote) will acquire all the assets of Fording Canadian Coal Trust (FDG Quote) in a cash and stock deal.

The transaction is estimated to be worth $13.9 billion, of which $12.4 billion will be in cash. The assets being acquired include royalties from Fording's 60% interest in the Elk Valley Coal Partnership.

Elk Valley operates six mines in Alberta and British Columbia that produce high-quality hard coking coal.

"Fording unit holders are receiving a significant premium to the Fording unit price during a time when comparable coal companies have declined substantially from their highs," said Teck's CEO Don Lindsay, in a prepared press statement. "For Teck, the transaction is expected to be immediately and strongly accretive to both earnings and cash flow."

Shares of Teck were rallying more than 3% in recent market action. Fording was up 7%.