Metinvest Group agreed to acquire United Coal, the leading coking coal producer in the US, for USD ~2.5 bln, mergermarket reported yesterday, citing sources familiar with the situation. The deal was reportedly agreed to several weeks ago, but yet to be formally announced. Andriy Gerus: As we expected (see our Azovstal Flash Note of October 13), Metinvest is active on the M&A front. Azovstal’s (AZST: BUY) dividend payout (shareholders will vote on the allocation of the company’s USD 1.1 bln retained earnings at their AGM on October 25) could be a mechanism to transfer cash to Metinvest B.V. to pay for the United Coal acquisition. With this takeover, Metinvest would be fully self-sufficient in coking coal, increasing its met coal production by 80% to 16.6 mln mt p.a.; this news is positive for the main group’s coke asset, Avdiyivka Coke, which will secure supplies of high grade coking coal.