US coal producer Arch Resources has entered a merger deal with domestic peer CONSOL Energy, setting the stage for the creation of Core Natural Resources.
The new entity aims to become a premier North American natural resource company with a strategic focus on global markets, leveraging its combined assets in coal production.
It is poised to be a top producer and exporter of coal, from metallurgical to high calorific value thermal variants.
This “merger of equals” will consolidate operations across six states, offering the combined business ownership of 11 mines, including a top-tier thermal coal complex and a significant metallurgical coal mine portfolio in the US.
The new company will benefit from extensive market access, with ownership interests in two export terminals on the US Eastern seaboard and connections to ports on the West Coast and Gulf of Mexico.
Arch stockholders will receive 1.326 shares of CONSOL common stock for each share held.
Post-merger, Arch stockholders will own around 45% of Core Natural Resources, with CONSOL stockholders owning almost 55% on a fully diluted basis.
The deal is due to complete by the end of the first quarter of 2025, contingent upon regulatory and stockholders’ clearances and other standard closing conditions.
In 2023, Arch and CONSOL jointly sold 101 million tonnes of coal to a diverse customer base, including steelmakers, industrial companies and power generators.
Arch CEO Paul Lang stated: “This merger will join two proven leadership teams and best-in-sector operating platforms to establish a premier North American coal producer with worldwide reach and world-class mining and logistics capabilities.
“Core Natural Resources will enjoy the benefits of CONSOL's growing seaborne thermal business focused on industrial applications coupled with Arch's significant exposure to attractive global metallurgical coal markets.
“Together, we expect to realise meaningful operating synergies through the optimisation of support functions, greatly enhanced marketing opportunities, and a significantly expanded logistics network, which will enhance our ability to deliver coal reliably and efficiently to our global customers.”
