Joy in talks to buy China’s Int’l Mining

NEW YORK – Mining equipment maker Joy Global Inc is in talks to buy China’s International Mining Machinery Holdings Ltd,a maker of coal-mining equipment, according to a Bloomberg report.

A deal could be announced this week, Bloomberg said, citing a person with knowledge of the matter.

Neither Joy Global nor International Mining could be reached for comment.

International Mining shares were suspended Monday in Hong Kong trading. The company, controlled by private equity firm Jordan Co LP, has a market value of HK$8.5 billion, or about $1.1 billion, according to Reuters data.A deal would make strategic sense, partly because it would keep Caterpillar Inc from gaining further scale in China, Baird Equity Research analyst Robert McCarthy said in a note to clients. China is the world’s largest coal mining market, three times the size of the US market.

In May, Joy Global said it would buy Rowan Cos Inc’s drilling and mining gear unit for $1.1 billion in cash as it looked to offset competition in its main market by entering the oil and gas drilling business.

Joy Global’s expansion into a new market follows Caterpillar’s $7.6 billion purchase of main rival Bucyrus — a deal that leaves Joy Global as the last stand-alone US-based maker of mining equipment.

Caterpillar completed the Bucyrus deal this week.

If it won control of International Mining, Joy Global could add 40 cents a share to fiscal 2012 earnings, McCarthy said. Joy Global is forecast to earn $7.24 a share next year, according to Thomson Reuters.

Joy Global shares were up 1.7 percent to $95.35 in afternoon trading on Nasdaq. Caterpillar was up 2.2 percent to $109.26.

Source:China Daily

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