Arch Resources, Inc. and Consol Energy Inc. have announced an all-stock merger of equals to create Core Natural Resources, a premier North American natural resource company focused on global markets. The combined company will own 11 mines, including one of the largest, lowest cost, and highest calorific value thermal coal mining complexes in North America.
Pro forma, Core Natural Resources would have had revenues of approximately $5.7 billion and adjusted EBITDA of approximately $1.8 billion in 2023. The merger is expected to generate $110 million to $140 million of annual cost and operational synergies and is anticipated to be accretive to free cash flow in the first full year following the close of the transaction.
Core Natural Resources is expected to have a net cash position of approximately $260 million as of June 30, 2024. The company's strong cash flow and balance sheet are expected to provide significant financial flexibility and improved access to capital to support robust capital returns in a wide range of market environments, as well as value-creating investments.
The merger is expected to close by the end of the first quarter of 2025, subject to approval by both companies’ stockholders, regulatory approvals, and the satisfaction of other customary closing conditions.
In connection with the execution of the agreement, the Consol board declared a dividend equal to $0.25 per share, payable in cash on September 13, 2024, to holders of record of Consol common stock as of the close of business on August 30, 2024. Arch and Consol will suspend share repurchases until the transaction is completed.
The combined company will be led by a proven team, with Mr. Brock serving as executive chairman and Mr. Lang as chief executive officer. Mitesh Thakkar, Consol’s president and chief financial officer, will serve as president and CFO of the combined company.
The merger is expected to create a leading North American coal export business with approximately 25 mtpa of export capacity across two marine export terminals on the U.S. eastern seaboard and strategic connectivity to ports on the west coast and Gulf of Mexico. The market has reacted to these announcements by moving the company's shares -0.2% to a price of $126.74. For the full picture, make sure to review Arch Resources's 8-K report.
