Australia's Centennial Coal Co Ltd agreed to a $2 billion takeover offer from Thailand's Banpu Public Co Ltd , giving the Thai group a beachhead in Australia it has long sought.
The deal is the first of several expected in Australia's resources sector after the government watered down plans for a big mining tax, with Centennial's rival Macarthur Coal seen as another likely target.
Banpu has been eyeing Centennial, Australia's largest independent coal producer, for some time and was not worried about the mining tax, a source close to the deal said.
The mining tax was never a factor for them. They're not interested in quick returns. They want a strategic position in this market and saw Centennial as the best fit, said the source, who declined to be named as the deal was ongoing.
Banpu offered A$6.20 a share, a 40 percent premium to Friday's close, for the 80 percent it does not already own.
The Thai group first bought a 14.9 percent stake in May and then raised it to 19.9 percent.
It plans to fund the acquisition from cash reserves and under new and existing credit lines, and plans to keep current management in place.
The deal is subject to approval from Australia's Foreign Investment Review Board.
Trading in the shares of Centennial was delayed on Monday and the stock will open at 0100 GMT, one hour later than usual.
(Reporting by Sonali Paul; editing by Balazs Koranyi)