Arch Coal to Buy International for $3.4 Billion

Arch Coal is buying rival International Coal Group in an all-cash deal valued at $3.4 billion.

The companies said Monday the new company will form the nation's second largest supplier of metallurgical coal, which is used to make steel.

Arch Coal expects the deal to boost earnings starting next year.

The acquisition, which amounts to $14.60 per share, has been approved by the boards of both companies. Shareholders that control 17 percent of International's stock have agreed to the deal, which must still be approved by regulators.

Arch Coal is based in St. Louis and ICG is based in Scott Depot, W.Va.

Shares of International Coal jumped 31 percent while Arch slipped 2 percent in premarket trading.