Aug 21 (Reuters) - Arch Resources (ARCH.N) , opens new tab agreed to merge with Consol Energy (CEIX.N) , opens new tab in an all-stock deal on Wednesday to create a North American coal mining giant that will be valued at more than $5 billion.

Consol will issue 1.326 of its common stock for each share of Arch Resources, or about $125.61 on a per-share basis, according to Reuters' calculations, as per the last close.

The new company would be called Core Natural Resources, which will trade under a new ticker symbol that the companies are yet to disclose.

Consol Energy's shares gained 2% in premarket trade, while those of Arch Resources rose 3.4%.

There has been a lack of investment in new coal mines amid tight emission regulations, but the fossil fuel is expected to remain part of the energy mix for years to come.

The two companies had sold an aggregate of about 101 million tons of coal in 2023.

The combined entity would own 11 mines across six states that produce thermal and metallurgical coal, used for heat generation at power plants and in steel-making.

The deal is expected to generate $110 million to $140 million of annual cost and operational savings in a period of six to 18 months following the close of the transaction, which is expected in the first quarter of 2025.

Arch stockholders will own about 45% of the combined company, with Consol shareholders owning the rest.

Deal-making in the sector has gained momentum over the last one year as demand, especially for coking coal, remains strong.

Commodities trader Glencore (GLEN.L) , opens new tab concluded its deal to buy coal assets of Canada's Teck Resources (TECKb.TO) , opens new tab earlier this year, while Anglo American (AAL.L) , opens new tab is seeking buyers for its Australian metallurgical coal mines after rebuffing BHP's (BHP.AX) , opens new tab $49 billion takeover offer earlier in the year.

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https://www.reuters.com/markets/commodities/consol-energy-arch-resources-merge-create-5-bln-coal-mining-entity-2024-08-21/