%ArchResources (NYSE: $ARCH) and %ConsolEnergy (NYSE: $CEIX) are merging in an all-stock deal that will create a North American %Coal mining giant.
According to the news release announcing the merger, the combined companies will be valued at more than $5 billion U.S.
Consol Energy is paying the equivalent of $125.61 U.S. per share for Arch Resources. Arch stockholders will own 45% of the combined company, with Consol shareholders owning the rest.
The new company will be called “Core Natural Resources” and will trade under a unique ticker symbol that the companies have not yet announced.
Once the merger is completed, the new company will own 11 mine sites across six U.S. states and produce both thermal and metallurgical coal that is used for heat generation at power plants and in steelmaking.
Separately, the two companies sold 101 million tons of coal in 2023.
The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2025 and generate up to $140 million U.S. in annual cost savings.
This is the latest consolidation to occur in the global coal sector. Commodities trader Glencore (GLEN) bought the coal assets of Canada's Teck Resources (TECK.B) earlier this year.
Anglo American (LON:AAL) has announced that it is seeking a buyer for its Australia-based metallurgical coal mines and related operations.
The stock of Consol Energy is up 8% on news of the merger. In the last 12 months, the stock has risen 22% and currently trades at $102.50 U.S. per share.
Arch Resources stock has gained 6% on news of its combination with Consol Energy. In the last year, its share price is flat (up 0.86%) and trading at $134.76 U.S.
