Joy Global announced on July 21 that its board of directors unanimously approved a definitive merger agreement where Komatsu America Corp. will acquire Joy Global in a transaction valued at about $3.7 billion. Under the terms of the agreement, Joy Global stockholders will receive $28.30 per share in cash for each outstanding share of common stock held, representing a 48% premium to Joy Global’s shareholders.

Komatsu intends to operate Joy Global as a separate subsidiary of Komatsu and retain Joy Global’s brand names. The companies will align the organization and operation for optimal customer support from Joy Global’s headquarters in Milwaukee, Wisconsin. Komatsu said Joy Global’s products and services are highly complementary and the combined organization will continue to focus on safety, productivity and life cycle cost improvement for customers. Komatsu plans to leverage both companies’ leading technologies to pursue product and service innovation to enhance mine safety and productivity. In addition, the companies employ complementary strategies and are committed to an integrated direct sales and service model.

“We believe this is the right partnership to meet the evolving needs of our customers while furthering our ability to lead the mining industry with game-changing technologies and best-in-class products,” said Ted Doheny, president and CEO of Joy Global. “Joy Global’s board of directors, in making its determination, considered the challenging market conditions the company believes are likely to persist.”

The transaction is subject to customary closing conditions, including approval by Joy Global stockholders, the expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act and regulatory approvals in certain other jurisdictions. The transaction is expected to close by mid-2017.