Komatsu Ltd and Linde AG have agreed to sever a financial link between the two companies, less than five years into their joint venture.

In May 2002, Linde became a 35 per cent shareholder in Komatsu Forklifts, of Japan, running a joint-venture company, Komatsu Forklift Co Ltd, with Komatsu (Forkliftaction.com News #57).

Last week, Linde announced Komatsu's intention to buy back the 35 per cent shareholding and make Komatsu Forklift Co Ltd a wholly owned subsidiary.

However, both companies will continue existing partnerships in Europe, Asia and Japan. Linde subsidiary OM Carrelli Elevatori SpA is a Komatsu forklift distributor in Europe and manufactures Komatsu products under licence. Komatsu Forklift Asia Pte Ltd, Singapore, distributes Linde-owned Still forklifts rebadged as Komatsu and Komatsu is a Linde distributor in Japan (Forkliftaction.com News #7).

The share buyback is expected to be finalised in early August.

The move is the latest corporate strategy for Linde Group, which last week announced the break away of its materials handling segment to focus on its gas and engineering business (Forkliftaction.com News #270).

A Komatsu spokesperson said Linde's intention to acquire BOC had triggered talks between the two companies about their joint-venture agreement (Forkliftaction.com News #244).

"Linde and Komatsu intend to continue regional alliances as long as they are beneficial for both parties," he said.

The spokesperson said since Komatsu established its Jining plant, about 650km northwest of Shanghai, Komatsu manufactured its own forklifts for the Chinese market. Linde's Xiamen plant previously produced Komatsu forklifts and components on Komatsu's behalf (Forkliftaction.com News #57).

Forkliftaction.com News previously reported that the Shanghai subsidiary sold Linde forklifts imported from Germany (Forkliftaction.com News #132). The Komatsu spokesperson said Komatsu Shanghai only sold Komatsu forklifts from Japan and Still class I, II and III electric forklifts from Germany.