In a joint weekend announcement, Murray said it would acquire an 80% voting interest in Foresight for cash consideration of $1.395 billion.

Foresight founder Chris Cline will maintain stakes of Foresight and related companies, giving him the remaining 20% voting interest.

The definitive agreement for the transaction would create the premier “coal mining company in the United States” that controlled over nine billion tons of coal reserves, Murray said.

"Chris 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 utilising the longwall mining technique,” Murray chairman, president and CEO Robert Murray said.

“We are pleased that these operations will join Murray Energy's twelve mines employing thirteen longwall systems. We are very excited about this new venture and the resultant world class organisation. It is truly a transformative event for our companies and the entire world coal industry.”

Cline said it was a great day for American coal.

"Bob Murray and I both started as miners, and we know how to run safe, efficient and low cost mining operations. We think that we will do that even better together by sharing best practices and exploiting obvious synergies on cost. Together, we will progress our efforts to deliver reliable and low cost electricity to America's factories, schools, hospitals and homes."

The Murray boss also praised Foresight for its low cost performance during an extremely distressed coal market place.

“Foresight Energy has continued to be the low cost producer in the Illinois Basin, with a focus on safely producing high quality, high heat coal, strategically located near low cost transportation,” he said.

“This is wholly consistent with the ‘Concentric Ellipse’ strategy that I outlined for Murray Energy nearly thirty years ago. 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. This will help us to compete at an entirely new level in the global marketplace."

The joint statement did not reveal expected dates for the transaction to close.