Peabody Energy said it had agreed to sell its New Mexico and Colorado coal assets to Bowie Resource Partners for $358 million in cash.
Shares of the company jumped more than 15 percent in premarket trading following the announcement. (Get the latest quote here.)
Bowie will also assume about $105 million in related liabilities, Peabody said on Friday.
Bowie, which confirmed the deal later in the day, said the acquisition would nearly double its production output to 25 million tons per year, generating annual revenue of $1 billion.