ArcelorMittal in Talks to Buy Alpha Natural-Source

ArcelorMittal, the world's top steelmaker, is in discussions with US coal miner Alpha Natural Resources Inc about a possible takeover, a source familiar with the matter said Friday.

"It is a complex matter," the source said, adding that discussions were ongoing.

ArcelorMittal declined to comment.

Last month, Alpha Natural agreed to be acquired by iron ore pellet maker Cleveland-Cliffs Inc in a deal now worth about $8.7bn.

On Thursday, the Financial Times reported that ArcelorMittal was mulling a counterbid for Alpha Natural, whose shares were up 6.4% at $105.30 in afternoon trading.

The paper said ArcelorMittal had indicated its willingness to make an all-cash offer for Alpha in June. ArcelorMittal's bid was at or near $110 a share, the FT said, citing its sources.

Alpha Natural and Cleveland-Cliffs could not immediately be reached for comment.

But after the FT report, an Alpha spokesman told Reuters that it has a "definite merger agreement" with Cleveland-Cliffs and that Alpha was determined to see the deal to the finish line.

The spokesman then declined to comment on any counterbids the company may have been offered.

The FT said that ArcelorMittal could also wait for the deal to break down or for it to go through, which could make the combined entity a takeover target as well.

Alpha Natural's shares were up $6.35 on the New York Stock Exchange, while Cleveland Cliffs shares were down $3.36, or 3.1%, at $105.05.

ArcelorMittal shares closed down 3.7%.

Reporting by Eleanor Wason, Michael Erman and Paritosh Bansal, Reuters