Komatsu has completed its acquisition of Joy Global – to be renamed Komatsu Mining Corporation – and pledging to keep the headquarters of the US mining solutions company in Milwaukee, Wisconsin.
The Japanese equipment giant and global number two equipment producer announced its $3.7bn acquisition proposal for the $2.9bn Joy Global business in July 2016, and secured antitrust clearance for the deal in January.
“The combination of our Komatsu-brand surface mining equipment with the P&H, Joy and Montabert brands of surface and underground products will allow us to offer a complete range of mining solutions for our customers,” said Tetsuji Ohashi, president and CEO of Komatsu.
“We plan to build on the strength of our shared cultures, including our unwavering belief in safety first and our passion for providing innovative solutions, to become an unrivaled mining solutions and services provider.”
Komatsu is paying $28.30 for each Joy Global share, which represents a premium of more than 20% on the company’s share price prior to the announcement of the deal, hence the high valuation.
The deal is Komatsu’s largest-ever acquisition, and bolsters its ability to compete with Caterpillar.
The Japanese manufacturer has acknowledged the demand for mining equipment had “declined dramatically”, but asserted that Joy Global will strengthen its offering of larger loading and underground equipment that will have higher ‘economic rationale’ under recovery conditions.
The purchase of Joy Global reduces the list of independent mining equipment companies to a just few names, including Atlas Copco, Sandvik and Boart Longyear.
With the close of the transaction, Komatsu now employs more than 57,000 people.
Komatsu Mining Corporation will be led by Jeffrey Dawes, formerly leader of Komatsu Latin America.
Joy Global shares will be delisted from the NYSE and will no longer be publicly traded.