The agreement follows the announcements made by the companies last month that they had begun exclusive negotiations regarding the potential business combination.
Walter Energy will buy all of the outstanding common shares of Western Coal for CAD11.50 per share in cash or 0.114 of a Walter Energy share, or for a combination thereof, all subject to proration.
Following the acquisition, Walter Energy will have total coal reserves of approximately 385 million tons.
Walter Energy interim CEO Joe Leonard said that Western Coal has an attractive high-quality metallurgical coal asset base and has embarked on an organic growth strategy that is expected to increase production more than 60% by fiscal 2013.
"Our combined production capacity and geographic footprint leaves us extremely well positioned to benefit from favorable sector dynamics driven by increased steel production in markets such as China, India and Brazil. Bottom line, and this is the right transaction at the right time," Leonard said.
