CHARLESTON, W.Va. — Ohio-based Murray Energy is buying a controlling stake in rival coal operator Chris Cline’s Foresight Energy, giving Murray significant new coal reserves and larger output in the midwestern coalfields of Illinois, the companies announced Sunday night.
The $1.4 billion deal, which Murray said it would finance with additional indebtedness, creates a coal company with control of more than 9 billion tons of reserves, the companies said in a statement.
“We are very excited about this new venture and the resultant world-class organization,” Murray CEO Bob Murray said. “It is truly a transformative event for our companies and the entire world coal industry.”
The Murray-Foresight deal comes on the heels of privately-held Murray Energy’s $3.5 billion move in late 2013 to buy the Northern West Virginia operations of CONSOL Energy.
Cline, a West Virginia native, will remain a “significant” investor in Foresight, whose Illinois basin mining operations have fared better in recent years than many coal operations in the Central Appalachian fields of Southern West Virginia and Eastern Kentucky, where the industry is in the midst of a significant downturn. Murray’s CONSOL purchase likewise included large underground mines in Northern West Virginia, an area projected to hold more steady in its coal production than the state’s southern coalfields.