FLSmidth said the acquisition would shorten the time to market for innovations and technologies while boosting its service and aftermarket provision and customer base.
It also expects extended mining flowsheet coverage and a more localised approach due to a larger geographical footprint.
ThyssenKrupp's Mining equipment offering consists of open-pit mining equipment and systems, mineral processing solutions and material handling solutions. They are primarily involved in crushing, conveying, grinding and processing.
"We do have some overlap of technologies, but we see a clear complementary offering - especially in the areas of sustainability and digitalisation," said FLSmidth.
"For example, ThyssenKrupp has a strong in-pit crushing set up which is complementary to our existing offering, and in grinding, they have a strong position with HPGRs, whereas we are a leading provider in other grinding solutions, such as SAG mills."
The companies intend to combine efforts on green technologies focused on the mining industry and digitalisation solutions.
"The addition of ThyssenKrupp's digital solutions in areas such as service, control systems and in the digitalisation of products to FLSmidth's already robust digital ENABLR portfolio will deliver an expanded and exciting range of benefits to the customer."
The deal for the unit, which employs some 3,400 people and generated sales of around €800 million in the 2019-2020 fiscal year, is expected to complete in the second half of 2022.
The newly formed company that emerges following the deal will continue to operate under the FLSmidth brand. But integration will "begin immediately", following approvals.
"This is a truly transformational deal allowing us to accelerate our growth ambitions by creating one of the world's largest and strongest suppliers to the mining industry," said Thomas Schulz, Group CEO of FLSmidth.
"ThyssenKrupp's mining offering is an ideal fit with FLSmidth's MissionZero sustainability ambition and with our digitalisation agenda," added the Danish company in a statement.
Martina Merz, Group CEO of ThyssenKrupp, said: "FLSmidth is an excellent owner and a good new home for our mining activities. Both companies have a strong cultural fit and are a good match: the business models are comparable, the technologies complement each other well. The result is a world-leading technology provider from pit to plant."
The Germany-based engineering company started to sell the various division of its business, including its cement section, in 2020. FLSmidth said in mid-January 2021 that it had entered into non-binding negotiations with ThyssenKrupp over the possible acquisition of the mining business.