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Yancoal Australia Ltd share price rockets 40% higher

Much to the delight of its shareholders, the Yancoal Australia Ltd (ASX: YAL) share price has been the best performer on the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) today.

In afternoon trade the coal miner’s shares are up 40% to 38 cents.

Why has it jumped?

This morning the company announced that Rio Tinto Limited (ASX: RIO) shareholders have approved the sale of its Coal & Allied business to Yancoal for US$2.45 billion.

Rio will also receive $240 million via unconditional guaranteed royalty payments, payable over five years.

According to today’s release, Yancoal expects the acquisition to complete in the third quarter. When it does it will make the company the largest pure-play coal producer in Australia.

The coal miner’s shares have now gained in excess of 340% in the last 12 months.

The Rio Tinto Limited share price is flat on the news.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.