Bloomberg: Joy Global In Talks To Acquire China's International Mining Machinery

(RTTNews) - Mining equipment maker Joy Global, Inc. (JOYG: News ) is close to acquiring Chinese coal-mining equipment maker International Mining Machinery Ltd. (ICMHF.PK), according to Bloomberg on Wednesday. The deal is expected

to be announced as early as this week, the report said.

International Mining, having a market values of about $1.1 billion, is controlled by private-equity firm Jordan Co., which owns 41 percent stake in the company. If the proposed acquisition goes through, it will be Joy Global's second billion-dollar deal in two months.

Last month, Milwaukee, Wisconsin-based Joy Global completed that acquisition of LeTourneau Technologies, Inc., that was agreed in May, from onshore and offshore contract drilling services provider Rowan Companies, Inc. (RDC) for $1.1 billion in cash. LeTourneau is a the manufacture of large capacity wheel loaders for the surface mining market as well as jack-up rigs and ancillary equipment for the oil and gas drilling industries.

The proposed acquisition of International Mining will also be the second billion dollar Chinese acquisition by an U.S.-based firm this month. On Sunday, Swiss food and nutrition products giant Nestlé SA (NSRGY.PK, NSTR.L) offered to acquire a 60 percent stake in Chinese snack and candy maker Hsu Fu Chi International Ltd. for about S$2.1 billion or $1.72 billion.

New York-based Jordan Co., founded in 1982, is a leading middle-market private equity firm with over $6 billion of assets under management and a successful track record of investing in and growing businesses across a wide range of industries. It also has offices in Chicago and Shanghai. According to the report, the sale of Jordan's stake in International Mining would trigger a mandatory offer for the rest of the company as per Hong Kong Law. The trading of shares of International Mining has been suspended since Tuesday on the Hong Kong Stock Exchange.

The Resolute Fund, L.P., a fund managed by Jordan Co., made the initial International Mining investment in May 2006, when it formed it to acquire 100 percent of Jixi Coal Mining Machinery Co. Ltd., and Jiamusi Coal Mining Machinery Co., Ltd. Jixi is the leading manufacturer of shearers in China and Jiamusi is the leading manufacturer of roadheaders in China.

International Mining then raised gross proceeds of $327.4 after pricing a 520 million share public stock offering at HK$4.88 per share and got listed on the Hong Kong Stock Exchange on February 10, 2010.

The acquisition in May 2006 by Jordan was the first by a US Company to complete an acquisition of 100 percent of a State Owned Enterprise. The proposed acquisition of International Mining could hit some regulatory hurdles as the Chinese government has not always been up to allowing 100 percent foreign ownership of domestic companies.

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