Whitehaven Coal will pay up to $6.4 billion for two coking coal mines in central Queensland in a "transformational" deal that's been praised by a union but criticised by coal sceptics.
Whitehaven is buying the Daunia and Blackwater mines from the BHP-Mitsubishi venture after lodging the winning bid.
"This transaction has delivered a good outcome for the BHP Mitsubishi Alliance, our workforce and the communities around the Blackwater and Daunia operations," BHP Australian minerals president Geraldine Slattery said on Wednesday.
"Whitehaven Coal has a strong track record as a responsible and reliable operator, and we will work closely with them to achieve a smooth change of ownership focused on maintaining safe and productive operations and supporting people and communities through the transition."
Whitehaven chief executive Paul Flynn said it was a "compelling transaction for Whitehaven that accelerates our strategy, transforms our company and delivers substantial value for our shareholders."
Whitehaven operates four thermal coal mines in NSW's Gunnedah Basin and the acquisition pivots its portfolio towards coking coal, which is in high demand for steelmaking across Asia.
The company said it would consider a minority selldown to global steel producers, creating a strategic joint venture that would reduce its funding arrangements.
Whitehaven plans to fund the deal through available cash, a $US900 million ($A1.4 billion) bridge facility from Bank of America and Jefferies and vendor financing, with the joint venture allowing Whitehaven to pay about a third of the purchase price over three years.
Mr Flynn told AAP lining up corporate financing for the deal hadn't been an issue.
"Funding for met coal assets definitely is much improved compared to funding for thermal coal assets," he said.
"Organising a debt for these projects was not a problem."
Whitehaven said the acquisition was made at an underlying earnings multiple of just 1.8-times, using current spot pricing and did not require shareholder approval.
Bell Rock Capital, a London-based hedge fund that owns nearly five per cent of Whitehaven shares, had campaigned against the acquisition which it fears could destroy shareholder value.
It wants the miner to put it to a shareholder vote and has complained about the "transformational nature" of the deal to the Australian Securities Exchange.
Mr Flynn said that while he understood the confidential nature of merger and acquisition activities could be discomforting for some shareholders, he hoped Bell Rock would come to see the upside.
Whitehaven shares finished Wednesday up 11.5 per cent at a six-month high of $7.57 on the back of the deal.
"The reaction of the market today would tend to suggest a view that aligns with our own, that this is a very compelling proposition that transforms Whitehaven into a metallurgical coal company," Mr Flynn said.
"It's highly accretive, and we've paid a very reasonable price using significant vendor finance."
About 2500 permanent, contract and labour hire coalminers work at the mines.
The Mining and Energy Union was pleased Whitehaven had committed to ending what it describes as BHP's "sham in house labour hire model" and offer permanent employment to those employed by BHP's labour hire subsidiary, Operations Services.
"Nearly 400 OS workers and their families will be celebrating this news and can look forward to a substantial improvement to their pay and conditions," MEU Acting Queensland District President Mitch Hughes said.
The Australasian Centre for Corporate Responsibility condemned the sale, with corporate strategy lead Naomi Hogan calling it "irresponsible".
"Whitehaven Coal is a company determined to keep digging up and burning coal as more responsible stewards race to limit global warming," and selling the coalmines to it serves to undermine global efforts to limit global warming, Ms Hogan said.
