Komatsu Ltd. announced that it has signed a definitive agreement with Joy Global Inc., a leading manufacturer of surface and underground mining equipment, under which Komatsu America Corp., a wholly-owned subsidiary of Komatsu in the USA, will acquire 100% ownership of Joy Global. The Acquisition is expected to close in mid- 2017, subject to the approval of shareholders of Joy Global and the receipt of necessary regulatory approvals under laws in relevant countries.
Komatsu embarked in April on a mid-range management plan for the next three years (2016-2018) under the slogan "Together We Innovate GEMBA Worldwide – Growth Toward Our 100th Anniversary (2021) and Beyond". The Acquisition is in line with the growth strategy of the plan which calls for the Company to strengthen the core mining equipment business in an effort to achieve sustainable growth.
Joy Global is a worldwide mining machinery and services company founded in 1884. Through its leading brands -- P&H, Joy and Montabert – Joy Global 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 that complement existing Komatsu products. The company's integrated technology, services and solutions are a critical component of operations in a variety of commodity markets including energy, hard rock and industrial minerals. The company operates globally and generates an annual revenue of 3,172 million US dollars (approximately 333 billion yen at @105yen/U$).
Komatsu has engaged in the mining equipment business since its foundation in 1921. In the 1990s the Company expanded by acquiring selected mining equipment manufacturing and distribution businesses operating in major mining regions. Today, Komatsu's annual revenue of 450 billion yen from mining equipment business is generated by surface mining equipment only, as the Company's portfolio does not include equipment for underground mining. Further, the Company's product lineup does not include super large-sized loading equipment for surface mining. Demand for mining equipment has declined dramatically from the peak, reflecting economic slowdown in emerging countries and low commodity prices. Over the long term, however, the mining equipment business is projected to grow, driven by population growth and rapid urbanization around the world. In terms of mining techniques, economic rationale will call for use of larger equipment in surface mining as well as further development of underground mining.
Joy Global and Komatsu's product lines will integrate well, expanding options for customers worldwide, as Komatsu can now offer the underground mining equipment and super large-sized loading equipment of which Joy Global is a leading provider. Both companies value a direct sales and service approach and will continue to engage with customers globally. Merging manufacturing technologies and linking products through Komatsu's fleet management system will further capabilities on both sides to directly engage with customers to optimize machine performance and enhance automation for safety and productivity gains. Komatsu will continue to offer Dantotsu products, Dantotsu services, and Dantotsu solutions to our customers to jointly create innovation in mining operations.
Read the full official Komatsu press release here.