Leading U.S. longwall operator Murray Energy Corp. (MEC) announced in mid-March that it would take a controlling interest in Foresight Energy in a nearly $1.4 billion deal, forming one of America’s biggest coal mining companies. Murray Energy now operates 13 longwall mines and controls more than 9 billion tons in coal reserves in the Illinois Basin (ILB) and Appalachia.
Foresight’s founder, Chris Cline, will remain a significant investor in Foresight Energy, maintaining a 22.5% equity interest in Foresight Energy GP and 35% interest in Foresight Energy LP. He will also remain on the board.
“Cline, who is very much respected in the United States coal industry, and his team at Foresight Energy, have built and operated four of the most efficient coal mines in America utilizing the longwall mining technique,” MEC Chairman, President and CEO Robert E. Murray said. “We are very excited about this new venture and the resultant world-class organization,” adding that the transaction is “truly a transformative event.”
Cline called the combination a “great day for American coal” and noted some historical parallels. “Murray and I both started as miners, and we know how to run safe, efficient and low-cost mining operations,” Cline said. “We think that we will do that even better together by sharing best practices and exploiting obvious synergies on cost.”
Murray also noted that the deal will help the newly paired company “to compete at an entirely new level in the global marketplace. Moreover…the newly combined companies and operations will provide a strategic platform for further growth of our businesses. The structure and financial benefits of this transformative transaction will facilitate the reduction of our debt and further acquisitions and will provide additional operating flexibility,” he said.