Alpha Natural Resources has signed a merger deal with Massey Energy to acquire all outstanding shares of Massey’s common stock, valued at $8.5bn

Under the deal, Massey stockholders will receive 1.025 shares of Alpha common stock and $10 in cash for each share, valued at $69.33.

The merger will bring together the assets of Alpha and Massey, which include more than 110 mines and combined coal reserves of around five billion tons along with one of the world’s largest metallurgical coal reserve bases.

The new entity is anticipated to allow the firms to benefit from geographical and asset diversification, including operations and reserves in Central and Northern Appalachia, the Illinois Basin and the Powder River Basin in Wyoming, US.