Japanese mining equipment-makerKomatsu Ltd. signed adefinitive agreement to acquire smaller competitor for about US$3.7billion, including the Wisconsin-based group's debt, the companies said inseparate July 21 statements.
Joy Global shareholders willreceive US$28.30 in cash for each share held, a 48% premium on the averageshare price for the 90 trading days before the deal announcement. Komatsu'sKomatsu America Corp.unit will acquire the smaller firm. Joy Global will be operated as a separatesubsidiary of Komatsu Ltd. to retain the brand image.
According to the Japanese company,the acquisition will bolster its product line and strengthen its marketposition as the mining equipment business is projected to grow, driven bypopulation growth and rapid urbanization around the world.
The deal remains subject tocustomary conditions, including Joy Global shareholders' approval, and closingis expected in mid-2017.
In a separate transaction, U.S.steelmaker NucorCorp. has agreed to acquire Joy Global's steel plate mill inLongview, Texas, for about US$29 million, with a view to increasing its shareof higher value-added plate products.
Nucor said July 20 that the JoyGlobal mill produces carbon and alloy plate products with heat-treatingcapabilities and will complement its two existing plate mills, adding an annualcapacity of 180,000 tonnes to its existing production capabilities.