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Yanzhou Coal Mining Company will become the largest standalone coal miner on the Australian stock exchange after Gloucester Coal Ltd. announced that its largest shareholder, Noble Group Ltd. will accept a $2.2 billion reverse takeover. Gloucester’s directors urged shareholders to accept the offer, which is conditional on the successful completion of due diligence and an independent expert’s report finding that the offer is fair and reasonable. Singapore’s Noble Group owns 64.5% of Gloucester, and confirmed in a statement that it intends to accept the offer in the absence of a superior proposal. Singapore-listed Noble Group said that it expects book a gain of about $200 million from its divestment.

Gloucester said the merged entity will be 23% owned by its shareholders and 77% by Yanzhou, which will contribute about $2.7 billion of debt immediately after the deal is completed.

Diversified mining houses BHP Billiton Ltd. and Rio Tinto Ltd. are the biggest coal miners listed in Australia, the world’s biggest exporter of coal.

Rio Tintoand partner Mitsubishi Corp. recently bought the remaining shares they didn’t hold in Coal & Allied Industries Ltd. in a deal that valued the target at A$10.8 billion.

U.S. coal miner Peabody Energy Corp. in November gained control of Macarthur Coal Ltd. with a A$4.9 billion bid, and Whitehaven Coal Ltd. this month agreed to buy smaller Aston Resources Ltd. for almost A$2.3 billion.

By buying foreign assets outright, China is filling projected supply gaps as well as reducing its exposure to fluctuations in coal prices. (WSJ, 12/23/2011)