(Reuters) - The U.S. Federal Trade Commission said on Wednesday it has filed a lawsuit to block a joint venture in Wyoming between coal mining companies Peabody Energy Corp and Arch Coal Inc as it would allegedly eliminate competition.
Peabody’s shares were down 8.8%, while those of Arch Coal slipped 4.3%.
The FTC said it filed a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri.
Peabody and Arch Coal said on Wednesday they intend to challenge the FTC’s decision in the coming months, adding they will continue to pursue the joint venture announced in 2019.
“We have provided tremendous amounts of evidence to the FTC during an extensive review, fully demonstrating that coal ... faces intense competition from natural gas and other alternate fuels,” Peabody Chief Executive Officer Glenn Kellow said.
The coal industry has been in steep decline for a decade due to competition from cheap and abundant gas and subsidized solar and wind energy, along with rising public concern over coal’s contribution to climate change.
Peabody had said in June last year it would combine its Powder River Basin and Colorado coal assets with Arch Coal in a joint venture with Peabody owning 66.5% and Arch the remaining.
Reporting by Chris Sanders in Washington and Shradha Singh in Bengaluru; Editing by Chizu Nomiyama and Shounak Dasgupta