The combined company will control more than nine billion tons of coal reserves.
Foresight Energy operates four coal mines in America using longwall mining technique. These mines will complement Murray Energy’s 12 existing mines that employ 13 longwall systems.
Murray Energy chairman, president, and CEO Robert Murray said: "Foresight Energy has continued to be the low cost producer in theIllinois Basin, with a focus on safely producing high quality, high heat coal, strategically located near low cost transportation.
"By partnering with Foresight Energy, we will be able to continue to ensure the safety of our miners, further reduce our coal production costs, and exploit the numerous synergies in our respective operations."
To finance the transaction, Murray plans to take $1.6bn term loan facility and raise $860m through sale of bonds.
The company expects the combined companies and operations to help it reduce debt and facilitate acquisitions, while providing additional operating flexibility.
In 2013, Murray acquired Consol Energy’s West Virginia coal operations for $3.5bn. The company has been seeking to expand production at these assets and pursue more acquisitions.
