Joy Global/Komatsu Deal Looking at Lengthy Antitrust Review

Komatsu Reports Strong Recovery in Construction and Mining Business; Raising FVE to JPY 3,100

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Event-Driven

We think Komatsu’s USD 2.9 billion all-cash offer for U.S. heavy equipment firm Joy Global is strategically positive. The acquisition will round out Komatsu’s mining product portfolio, add estimated annual free cash flow of JPY 35 billion-JPY 45 billion, and expand the company’s revenue base by 13%-15%.Komatsu’s existing mining product portfolio focuses heavily on surface-mining equipment, and the acquisition of Joy Global makes long-term strategic sense, as it provides the company with direct access to much-needed below-ground mining equipment product lines.Analyst: John Hu

We think Komatsu’s USD 2.9 billion all-cash offer for U.S. heavy equipment firm Joy Global is strategically positive. The acquisition will round out Komatsu’s mining product portfolio, add estimated annual free cash flow of JPY 35 billion-JPY 45 billion, and expand the company’s revenue base by 13%-15%.Komatsu’s existing mining product portfolio focuses heavily on surface-mining equipment, and the acquisition of Joy Global makes long-term strategic sense, as it provides the company with direct access to much-needed below-ground mining equipment product lines.Analyst: John Hu

Komatsu's Acquisition of Joy Global to Enhance Its Mining Portfolio and Free Cash Flow Generation

Komatsu Ltd

Komatsu's Acquisition of Joy Global to Enhance Its Mining Portfolio and Free Cash Flow Generation