Japanese heavy equipment maker Komatsu is to buy mining equipment manufacturer Joy Global in a deal worth US$3.7 billion, the companies have announced.
The deal will see Joy Global operate as a separate subsidiary of Komatsu, retaining the Joy Global bands names – which includes P&H, Joy and Montabert. The companies will also retain Joy Global’s headquarters in Milwaukee.
“This is a compelling transaction that delivers substantial and certain value to our stockholders, as well as expanded options for our customers and employees going forward,” said Ted Doheny, President and CEO of Joy Global.
Both companies have significant histories in the mining equipment sector – with Joy Global tracing its history back to 1884 and Komatsu to 1921. The acquisition will add Joy’s underground mining, rope shovels, super-large wheel loaders, draglines and drills to Komatsu’s large electric dump trucks, hydraulic shovels and crawler dozers.
“Komatsu and Joy Global’s products and services are highly complementary and the combined organization will continue to focus on safety, productivity and life-cycle cost improvement for customers,” said Joy Global in a press release.
Joy Global has been buffeted by a collapse in mining CAPEX spending over recent years – particularly in the US coal sector – a result of low commodity prices.
“The mining industry continues to face cyclical headwinds from oversupplied commodities and reduced end-user demand, resulting in cash flow restrictions for more producers, creating an increasingly challenging environment.” continued Doheny. “We are also seeing structural changes in the US and China coal industry.”
The acquisition is subject to approval by Joy Global shareholders and various regulatory approvals. It is expected to close by mid-2017.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/22072016/komatsu-buys-joy-global-2016-2060/