GE has made a surprise entry into the mobile mining equipment OEM world with announced acquisitions of two important underground mining equipment manufacturers which it says is “in support of the global expansion of its mining business.” GE has entered into an agreement to acquire 100% of Australia-based Industrea Ltd, the provider of safety and productivity-enhancing mining equipment and services. The company also signed a binding Letter of Intent (LOI) to acquire Fairchild International, the independently owned and operated underground coal mining equipment manufacturer located in Glen Lyn, Virginia.

The Industrea transaction is valued at approximately A$700 million, but terms of the Fairchild agreement were not disclosed. The company stated: “The combination of the two entities expands GE’s product offering to address approximately 35% of the underground mining value chain. Industrea Ltd and Fairchild International together are well positioned in dynamic growth regions for mining, including Australia, China (Industrea), and the United States (Fairchild). GE will enable these regionally focused enterprises to reach a global customer base with enhanced products based on GE’s clean propulsion systems, energy storage offering, and world-class system integration capabilities. Both Industrea Ltd. and Fairchild International will benefit from GE’s lean manufacturing and effective global supply chain management.” Both companies will become part of GE Transportation’s global mining business which already works with mines to provide innovative solutions in critical areas such as power, water, and productivity.

With more than 700 employees, seven Australian locations, and a significant presence in China, Industrea is said to be well positioned for growth across its four divisions: Mining Equipment (flame- and explosion-proof underground mining vehicles and equipment), Mining Technology (drill guidance systems and collision avoidance systems), Gas Management (specialised underground in-seam drilling and gas drainage services) and Mining Services (integrated contract mining services). With the proposed acquisition of Industrea, GE makes a strategic investment in expanding its manufacturing footprint to Australia and contributing to a strong industrial manufacturing base in the country. In addition, GE expands its product portfolio to underground mining and increases its presence in key mining regions Australia and China. Industrea is to “benefit from GE’s global footprint and customer relationships, and mining technologies.” The transaction will be subject to shareholder approval. Industrea shareholders will vote on the offer in the second half of 2012. The transaction is also subject to customary conditions including relevant regulatory approvals. The transaction is expected to close later in 2012.

In the other deal, GE Transportation signed a LOI to acquire Virginia-based, independently owned and operated Fairchild International. The company employs approximately 150 people and manufactures a wide range of underground coal mining equipment, including diesel and battery-powered scoops, continuous miners, haulage systems, shield haulers, and maintenance vehicles. With this acquisition, GE again aims to expand its product offering to underground mining but also grow Fairchild’s customer base beyond its core US market to serve mining customers worldwide. Lorenzo Simonelli, President and CEO of GE Transportation said: “With the acquisition of Fairchild International we will combine nearly fifty years of leading industry knowledge and expertise in designing, building and servicing underground mining equipment with GE’s global reach, technology leadership in clean propulsion and energy storage systems, and world-class system integration capabilities. We will bring the next generation of top performing underground mining equipment to mining customers around the globe.”