U.S. District Judge John Bates denied the request for a preliminary injunction that would have barred the $US364 million deal.

"We are pleased that the court has found no cause to prevent this transaction from moving forward," said Steven F. Leer, Arch's president and chief executive officer. "We are confident that completing this acquisition will create significant benefits for our customers, the end users of electricity, employees at both companies, and our shareholders."

The FTC had argued that the deal should be stopped because it would hurt competition among coal producers in Wyoming's Southern Powder River Basin, said Reuters. The FTC said the deal would leave the top three competitors controlling 86% of 2003 coal production in the Powder River Basin.

Bates concluded that the case "represents an attempt by the FTC to enjoin transactions that do not reduce the number of competitors and only modestly increase the concentration in what has been a very competitive market." The judge said the FTC had failed to demonstrate that there had been "tacit" coordination among coal producers in the market to limit production. And he said the agency had "far overstated" Triton's "competitive significance" in the market.

"We are very pleased that the court found no reason to enjoin our transaction, which we believe to be in the best interests of Triton and its shareholders, customers and other constituents," said James M. Hake, president and chief executive officer of Triton.

The Federal Trade Commission has the right to seek an emergency stay of the District Court's decision.