Joy for Komatsu after it agrees $3.7bn takeover

Komatsu has agreed a $3.7bn takeover deal for Joy Global Inc. a US-based leader in mining solutions.

The Japanese construction machinery specialist intends to operate Joy Global as a separate subsidiary and retain the strength of the Joy Global brand names.

Komatsu plans to leverage both companies’ leading technologies to pursue product and service innovation to enhance mine safety and productivity, Joy Global said in a statement.

“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 Chief Executive Officer of Joy Global.

“We believe this is the right partnership to meet the evolving needs of our customers while furthering our ability to lead the mining industry with game-changing technologies and best-in-class products. Joy Global’s Board of Directors, in making its determination, considered the challenging market conditions the company believes are likely to persist.”

He added: “The mining industry continues to face cyclical headwinds from oversupplied commodities and reduced end user demand resulting in cash flow restrictions for most producers, creating an increasingly challenging environment. We are also seeing structural changes in the U.S. and China coal industry.”

Joy Global provides advanced equipment, systems and direct services for the global mining industry. The company’s P&H, Joy and Montabert branded equipment is a critical component of operations in a variety of commodity markets including energy, hard rock and industrial minerals.

Based in Milwaukee, Wisconsin, Joy Global employs 12,000 people in 20 countries.