ST. LOUIS, March 23 /PRNewswire/ -- Arch Coal, Inc. (NYSE: ACI) announced today that it has signed an agreement to acquire Atlantic Richfield's Colorado and Utah coal operations and to simultaneously combine the acquired operations and its Wyoming operations with ARCO's Wyoming operations in a new joint venture to be known as Arch Western Resources LLC, which will be 99% owned by Arch Coal and 1% owned by Atlantic Richfield. The transaction is valued at approximately $1.14 billion. Arch Coal will manage the joint venture.
Through its ownership of Arch Western Resources, Arch Coal will add a powerful presence in western U.S. low-sulfur compliance coal to its leading low-sulfur coal production position in the eastern United States. Overall, Arch Coal will become the second largest U.S. coal producer with annual coal sales of close to 110 million tons, or roughly 10% of the nation's coal supply, and annual revenues of nearly $2 billion.
"With the completion of this transaction, Arch Coal will become the nation's premier producer of low-cost, low-sulfur coal -- one that can and will compete aggressively in virtually every major U.S. coal market," said Steven F. Leer, Arch Coal's president and chief executive officer. "ARCO operates some of the largest and most productive mines in the western United States. Arch Coal is the leading producer of low-sulfur coal in the eastern United States. In combining these operations, we will be creating a national coal company that is strategically positioned to supply the changing needs of electric utilities as they seek to meet the nation's growing demand for electricity; prepare to compete in a deregulated marketplace; and comply with the implementation of Phase II of the Clean Air Act in the year 2000."