Komatsu to acquire mining equipment manufacturer Joy Global

By MEq July 21, 2016 19:08

Komatsu Ltd. announced that it has signed a definitive agreement with Joy Global Inc., a leading manufacturer of surface and underground mining equipment, under which Komatsu America Corp., a wholly-owned subsidiary of Komatsu in the USA, will acquire 100% ownership of Joy Global. The Acquisition is expected to close in mid- 2017, subject to the approval of shareholders of Joy Global and the receipt of necessary regulatory approvals under laws in relevant countries.

Komatsu embarked in April on a mid-range management plan for the next three years (2016-2018) under the slogan “Together We Innovate GEMBA Worldwide – Growth Toward Our 100th Anniversary (2021) and Beyond”. The Acquisition is in line with the growth strategy of the plan which calls for the Company to strengthen the core mining equipment business in an effort to achieve sustainable growth.
Joy Global is a worldwide mining machinery and services company founded in 1884. Through its leading brands (P&H, Joy and Montabert), Joy Global manufactures and services advanced original equipment and parts for underground and surface mining applications, as well as material handling systems and components for a variety of applications, products that complement existing Komatsu products.

Komatsu has engaged in the mining equipment business since its foundation in 1921. In the 1990s the Company expanded by acquiring selected mining equipment manufacturing and distribution businesses operating in major mining regions.
Joy Global and Komatsu’s product lines will integrate well, expanding options for customers worldwide, as Komatsu can now offer the underground mining equipment and super large-sized loading equipment of which Joy Global is a leading provider. full-system-solutions

The Acquisition of Joy Global, which shares similar cultures, values and strategies with Komatsu, is expected to bring Komatsu the following two benefits:
(1) Complementary product lineup
Joy Global’s lineup of surface mining equipment includes rope shovels, super large wheel loaders, draglines and drills which Komatsu does not offer. Joy Global’s lineup of rope shovels and super large wheel loaders pair well with the super large electric dump truck Komatsu manufactures and will generate synergies in sales and services. In addition, Joy Global manufactures underground mining equipment, another area Komatsu has not engaged in. With the Acquisition, Komatsu will become a meaningful participant in underground mining as well.

(2) Stronger Dantotsu solution offerings
Joy Global places priority on providing solutions that enhance safety and productivity of customer operations. For example, JoySmart Solutions leverages the Internet of Things to connect customer products with experts using data and analytics to improve mine performance. Komatsu also engages in the improvement of safety and productivity with its Autonomous Haulage System, mine fleet management systems and KOMTRAX Plus, which all serve to visualize jobsite operations.

Komatsu will acquire Joy Global for U$ 28.3 per share (total of approximately 2,891 million US dollars). Komatsu plans to finance the Acquisition through funds on hand and bank loans and does not plan to increase capital at this stage.
Joy Global will operate as a separate subsidiary of Komatsu. After the Acquisition is complete, Joy Global will become a consolidated subsidiary of Komatsu. As the Acquisition is expected to close in or after April 2017, the Acquisition will have no impact on the results and performance of Komatsu for the fiscal term ending March 2017.