At completion, PVR will own its general partner PVG.

PVR owns and manages coal and other natural resource properties, while PVG owns a limited partner interest of about 37.6% in the company.

Under the agreement, PVG unitholders will receive 0.98 PVR limited partnership units for every PVG limited partnership unit owned at the time of closing.

The companies estimate that 38.3 million additional PVR limited partnership units will be issued and 19.6 million PVR units owned by PVG will be cancelled.

"We are pleased with the agreement of the boards of directors of PVR and PVG to merge the partnerships," PVR and PVG chief executive officer William Shea said.

"We think that the lower cost of capital that is expected to result from the merger, and the simplified partnership structure, will position PVR to take advantage of accretive market opportunities and grow our quarterly distribution. The current management team, which will remain in place, is excited about the prospects for PVR following the merger, and we believe this transaction will be beneficial to the unitholders of both [companies].”

The merger is anticipated to decrease PVR’s cost of capital and thereby improve its position to pursue growth opportunities, he added.

Once the deal closes, three independent directors of PVG’s general partner are expected to join the board of PVR’s general partner.

While a closing date wasn’t detailed, the company said the merger is subject to approval by a majority vote of the outstanding limited partnership units of both PVR and PVG.