One for sorrow, $2.9billion for Joy: Komatsu to buy U.S rival Joy Global
The Japanese mining equipment manufacturers Komatsu Ltd has entered an agreement to purchase Joy Global Inc, as the company bids to increase its presence in the mining industry.
Taking into account the Milwaukee based company’s current debts, the deal will be worth $3.7billion in total.
The deal comes at a time when the dollar has fallen 10 percent against the yen this year, encouraging Japanese companies to conduct international deals.
Demand for mining equipment has also fallen, with Komatsu specialising in the production of surface-only mining equipment.
With the declining demand, now is a “good time” for Komatsu to enter the underground mining business.
"The mining market is near the bottom now. Now is the good time (to do the acquisition)," Komatsu Chief Executive Tetsuji Ohashi told reporters.
"We have solid enough financial soundness to withstand a large scale acquisition."
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