China-based Yankuang Energy Group, the controlling shareholder of coal miner Yancoal Australia, is planning to take full ownership of the latter in a deal worth $1.79bn.

Yankuang Energy is offering a price of $3.6 per share to acquire the remaining 498.2 million shares of Yancoal Australia, which represents a stake of 37.74%.

The Chinese group said that the proposed transaction will help it further optimise its overall asset structure and boost shareholder equity value as well as support the development of Yancoal Australia.

Should the takeover happen, then the Australia-based coal miner will be delisted from Hong Kong and Australian bourses.

In a filing with the Hong Kong Exchanges and Clearing (HKEX), the coal miner stated: “At the request of Yancoal Australia Ltd (the “Company”), trading in the shares of the Company has been halted with effect from 9:00 a.m. on 26 May 2022 pending the release of an announcement in relation to inside information of the Company and pursuant to the Hong Kong Code on Takeovers and Mergers.”

As of the end of 2021, Yancoal Australia had six billion tonnes of coal resources and 819 million tonnes of saleable coal reserves.

It is among the largest pure coal companies in Australia with 63.2 million tonnes of raw coal production and equity saleable coal production of 38.6 million tonnes in 2021.

According to Yankuang Energy, Yancoal Australia’s Hunter Valley Operations, Moolarben, and Mount Thorley Warkworth mines are world-class coal assets that have long mine life and involve low operating costs.

The Chinese group claimed that Yancoal Australia’s assets will provide it with complementary and risk-hedging benefits on the basis of geographical location, coal types and sales markets.

Yankuang Energy stated: “The acquisition of further Yancoal Shares would help Yankuang Energy to further consolidate its resources, strengthen the synergy amongst its assets, increase its core competitiveness and risk resistance and achieve sustainable development, all of which would be in the long-term interests of Yankuang Energy and its shareholders.”