Joy Global launches China venture

Milwaukee-based Joy Global Inc. has entered into an agreement to purchase 534.8 million shares of International Mining Machinery Holdings Ltd. Stock for $585 million from TJCC Holdings Limited.
IMM is a leading designer and manufacturer of underground longwall coal mining equipment in China. It has strong domestic market positions in roadheaders and longwall shearing machines, and is growing the share of its armored-face conveyor and electric control systems businesses.
Completion of the sale is subject to the receipt of necessary approval from the Anti-monopoly Bureau of the Ministry of Commerce ("MOFCOM") of the People’s Republic of China and the satisfaction of other customary closing conditions.
Upon receipt of MOFCOM approval and completion of the share purchase agreement, Joy Global will be required to make an offer for the remaining 59 percent of IMM shares. The tender offer will be launched by Joy Global’s wholly owned Hong Kong subsidiary, Newco Hong Kong 123 Limited.
The transactions will be financed with a combination of cash, borrowings or with cash raised through an equity offering, depending upon the number of shares tendered and the amount of cash on hand.
"A core part of our business strategy has been to position ourselves for the high growth of the emerging markets, and the investment in IMM is a major step in the execution of that strategy," said Mike Sutherlin, president and chief executive officer of Joy Global. "The China coal market is large and diverse, and must be accessed with a multi-dimensional strategy. While the major mines generally use globally sourced equipment, a larger number of mines rely on local Chinese mining equipment manufacturers. Leadership in the China market requires strong positions specific to each segment, and IMM is an established market leader in the local market with premier products for longwall shearing machines and road headers. IMM is a very strong complement to our Joy Mining and P&H businesses, and gives us leading positions in each of the major segments of the China market."