Japanese construction, mining, and military equipment maker Komatsu Ltd, yesterday struck a deal to buy US-based mining equipment manufacturer Joy Global Inc for $2.9 billion.
The acquisition, which will be carried out by Illinois-based Komatsu America Corp, a wholly-owned subsidiary of Komatsu, is expected to close in mid- 2017, subject to the approval of shareholders of Joy Global and the receipt of necessary regulatory approvals.
Komatsu will pay $28.3 per share for a total of approximately 2.89 billion (303.6 billion), a 20 per cent premium to Joy Global's Wednesday's closing price.
Komatsu plans to finance the deal through cash on hand and bank loans.
Founded in 1884, Joy Global is a global manufacturer of mining machinery. Its leading brands include P&H, Joy and Montabert.
The Wisconsin-based company 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.
Joy Global operates globally and generates annual revenue of $3.17 billion.
For Komatsu, which generates annual revenue of more than $17 billion, the deal, will nearly double the size of its manufacturing equipment business and give it access to Joy Global's underground mining business.
The Tokyo-based company said that both companies product lines will integrate well, expanding options for its worldwide, since it can now offer the underground mining equipment and large-sized loading equipment of which Joy Global is a leading provider.