UBS head of investment banking for Asia David Chin is reported by Reuters as telling a media briefing in Shanghai that Gloucester's major shareholder, Singapore-based Noble Group, had backed the proposed deal.

“We feel that Gloucester is already a listed company and its parent is also a listed company, in Singapore,” he reportedly said.

“There should be few obstacles and the chance of success is very big."

Chinese companies need to acquire natural resource assets in Australia so they can tap its commodity base and provide the raw material for residential, commercial and infrastructure projects across China.

The proposed Gloucester acquisition was just one of the expected takeovers to come from China in the coming months across the resources and industrial sectors.

Yanzhou announced the $8 billion merger with Gloucester and its Australian Yancoal subsidiary which will see the Chinese giant own 77% of Australia’s largest independent coal mining company.

Under the terms of the proposal, Gloucester shareholders would be given $3.20 in cash and the option to receive either shares in the merged company or a combination of shares and contingent value rights through a scheme of arrangement.

The merged companies would have a strong presence in the Hunter Valley of New South Wales, with combined coal production of 15 million tonnes per annum.

Gloucester issued a statement saying: "The Gloucester directors believe that a combination of Gloucester and the Yancoal assets has the potential to create a world class coal production and export operation".

The merger is conditional on the new entity obtaining a listing on the Australian Securities Exchange and remains subject to shareholder approval, with 75% approval required from Gloucester shareholders.

The Gloucester directors have not yet recommended accepting the proposal but Noble Group, Gloucester’s largest shareholder with 64.5%, has indicated it would vote in favour of the merger.