Freehills has enjoyed a long-standing relationship with Peabody — the world’s largest private-sector coal company, supplying approximately 10 per cent of all US electricity and 3 per cent of global electricity. Peabody has been present in Australia since 1962 and the acquisition of Excel will add three coal mines and three domestic coal developments to its existing assets.

The Freehills team was led by partners Philip Christensen and Tony Damian.

The deal is slated to be closed in October of this year.

“It raises the question whether this is the start of a wave of consolidation in the coal industry,” said Damian. “On the back of this announcement, and if the market share prices of the other coal companies are any guide, that’s a real possibility. This could be the deal that kicks off three or four deals.” The focus in recent years may be Australian investment in overseas markets, but the Peabody bid “shows that inbound M&A still remains important”.

Having the Brisbane offices of Freehills, including lawyers specialising in mines and environment law as well as M&A’s also involved was a bonus, said Damian.

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Damien Clarke and Jim Peterson of McCullough Robertson are advising Excel Coal. “I’m tired, but very happy that we have reached this stage,” said Clarke. The Queensland firm has been Excel’s lawyers since the company started up as a small operation in Brisbane, during its move to Sydney, its float, and then its ultimate sale to Peabody. “McCullough Robertson has been riding the resources wave for the last 10 years and this is one of those classic cases where we’ve been able to deliver at all stages of the client’s growth.”

Clarke agreed with Freehills’ Damian that the deal was the start of something big. “This is going to impact significantly on the mining industry, and stimulate activity by the main steel houses who are looking to put their foot on projects in Australia and accelerate their plans for investment for fear of losing opportunities.”