Noble Group, the 64% owner of Gloucester, has signaled its approval of proposed a merger between Yancoal and Gloucester for its long-term strategy to create a “leading Australian-listed coal supplier of scale and diversified product mix,” said the Hong Kong-based company in a statement.

Last week Yancoal confirmed the planned merger, which is valued at AUD 2.2 billion (USD 2.23 billion). Under the merger, shareholders of Gloucester will receive a total AUD 700 million of cash payment by way of special dividend and capital reduction, the equivalent of about AUD 3.20 for each Gloucester share. Gloucester's shareholders will also be entitled in a pool of “contingent value rights” shares, which protect the value of the merged company's shares.

Noble also said it plans to hold its Yancoal shares for value accretion.