Caterpillar and Bucyrus
Interna-tional have announced that they have entered into an agreement under
which Caterpillar will acquire Bucyrus International in a transaction valued at
approximately $8.6 billion (including net debt). The acquisition is based on
Caterpillar’s key strategic imperative to expand its leadership in the mining
equipment industry, and positions Caterpillar to capitalize on the robust
long-term outlook for commodities driven by the trend of rapid growth in
emerging markets, which are improving infrastructure, rapidly developing urban areas and
industrializing their economies.
The transaction is expected to close in mid-2011. Caterpillar intends to locate
its mining business headquarters in South Milwaukee, Wis., where Bucyrus
headquarters currently is located, and maintain the Bucyrus brand for the
principal Bucyrus legacy products.
“For several years, mining customers have been asking us to expand our range of
products and services to better serve their increasingly complex requirements,”
says Caterpillar chairman and CEO, Doug Oberhelman. “This announcement says to
those customers that we heard you loud and clear. It is a strong statement
about our belief in the bright future of the mining industry. Our strategy
calls for disciplined investment in attractive industries that value our
product and service delivery model. Our performance through the global economic
turmoil of 2008-2009 allowed us to emerge with a strong balance sheet and the
ability to make strategic investments in companies like
Bucyrus.”
Tim Sullivan, Bucyrus president and CEO, says, “This is an outstanding and
financially compelling transaction for our shareholders. More fundamentally, it
is a testament to the tremendous value our talented team of employees has
created over the past several years, and to the strength of our brand in the
global mining machinery marketplace. I am confident that we have found an
excellent partner in Caterpillar. We are very pleased that Caterpillar has committed
to locate its mining business headquarters in Milwaukee, and we are confident that the
combined global platform will be extremely well positioned to capitalize on the
substantial growth opportunities in this market in the years ahead.”