Tokyo-based mining and construction equipment manufacturer Komatsu has reached an agreement to acquire US mining equipment firm Joy Global Inc for US$ 2.89 billion.
A press release from Komatsu said a “definitive agreement” had been reached by the two companies, “subject to approvals under laws in relevant countries”.
The Japanese firm has agreed to pay US$ 28.30 a share in cash for Milwaukee-based Joy Global – 20% higher than the company’s closing price on 20 July.
The deal will be Komatsu’s biggest-ever acquisition and signals its confidence that the recent upturn in commodity prices is set to continue.
Komatsu said the acquisition of Joy Global – which it first considered purchasing in 2012 – is a continuation of its strategy to “strengthen the core mining equipment business in an effort to achieve sustainable growth”.
Joy 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.
These products clearly complement existing Komatsu products, including the dump trucks and large-tonnage excavators it supplies to companies such as the British-Australian mining multinational Rio Tinto Group.
Last year, Joy Global acquired Doosan Infracore’s hydraulic breaker and attachment business Montabert. The deal for the French-based company was completed at the start of June 2015 for a price of € 110 million (US$ 121 million).