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CONSOL Energy Inc. to acquire remaining public stake in CONSOL Coal Resources LP

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World Coal,

CONSOL Energy Inc. (CEIX) and CONSOL Coal Resources LP (CCR) has recently announced that they have entered into a definitive merger agreement pursuant to which CEIX will acquire all of the publicly held CCR common units in an all-stock transaction valued at approximately US$34.4 million, based on the most recent closing price of shares of CEIX common stock.

Under the merger agreement, CEIX will acquire all of the approximately 10.9 million outstanding CCR common units that it does not already own at a fixed exchange ratio of 0.73 shares of CEIX common stock for each publicly held CCR common unit. This exchange ratio represents a 2.1% premium to the volume weighted average exchange ratio during the 20 trading days ended 22 October 2020. In aggregate, CEIX will issue approximately 8 million shares in connection with the proposed transaction, representing approximately 22.2% of the total CEIX shares that will be outstanding on a pro forma basis.

"We are extremely excited to announce this transaction, as we believe it will provide significant benefits for both CEIX and CCR stakeholders" said Jimmy Brock, President and CEO of CEIX. "We firmly believe these two companies are a much healthier entity once consolidated than they would be on a standalone basis, regardless of the circumstance. Simplifying the structure will bring immediate benefits to the combined entity such as improving its consolidated credit metrics, creating financial flexibility and eliminating dual public company costs. In the longer term, we expect this transaction will improve the creditworthiness of the combined entity, while also enhancing capital market access and trading liquidity. Finally, this merger accelerates our ability to return capital to our shareholders."

The transaction terms were negotiated, reviewed and approved by the conflicts committee of the board of directors of CCR's general partner and the board of directors of CCR's general partner. The CCR conflicts committee is composed of the independent members of the board of directors of CCR's general partner. The board of directors of CEIX also approved the merger agreement.

Subject to customary approvals and conditions, the transaction is expected to close in 1Q21. The transaction is subject to majority approval by CCR's common unitholders, approval by CEIX's stockholders and the effectiveness of a registration statement related to the issuance of the new CEIX shares to CCR's common unitholders. Pursuant to a support agreement entered into in connection with the transaction, CEIX has agreed to vote all of the CCR common units that it owns in favour of the transaction. CEIX currently owns approximately 60.7% of the outstanding CCR common units.

In connection with the closing of the transaction, CCR's common units will cease to be publicly traded and the incentive distribution rights in CCR will be eliminated.

Citi and Credit Suisse Securities LLC are acting as financial advisors and Latham & Watkins LLP is acting as legal advisor to CEIX. Intrepid Partners, LLC is acting as financial advisor and Sidley Austin LLP is acting as legal advisor to the CCR conflicts committee.

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