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Joy Global Inc.

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Joy Global will be acquired by Japanese mining equipment maker and seller Komatsu Ltd. for nearly $2.9 billion. A definitive agreement for the acquisition was signed by the representatives of both the companies, which is expected to close in mid-2017. Joy Global was facing challenges posed by weak demand from the mining industry. As per an EIA report, mild weather and cheap natural gas are expected to lower 2016 U.S. coal production by nearly 155 million short tons from 2015 levels. This will further increase difficulties for Joy Global as it depends to a large extent on coal miners. Joy Global maintained its fiscal 2016 guidance, but it expects both lines to come in on the lower end of the projection due to the challenging conditions prevailing in the global mining market. Amid constrained market conditions, the company is implementing cost-saving initiatives and is planning to invest in other commodities to lower its dependence on coal.

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