Caterpillar acquires Bucyrus

Caterpillar acquires Bucyrus for USD 8.6 billion

18.11.2010 | Editor: Marcel Dröttboom

Caterpillar acquires Bucyrus in a transaction valued at approximately USD 8.6 billion.

Peoria (IL), USA – Caterpillar and Bucyrus International have announced that they have entered into an agreement under which Caterpillar will acquire Bucyrus International in a transaction valued at approximately USD 8.6 billion.

Caterpillar and and Bucyrus International, announced the agreement under which Caterpillar will acquire Bucyrus International in a transaction valued at approximately USD 8.6 billion (including net debt) on Noember 15, 2010. The acquisition is based on Caterpillar’s strategy 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.

Under the terms of the transaction, which has been approved by the boards of directors of both companies, Bucyrus shareholders will receive USD 92 per share, USD 7.6 billion in aggregate consisting of all cash. The transaction is expected to close in mid-2011. Caterpillar intends to locate its mining business headquarters in South Milwaukee, Wisconsin, where Bucyrus headquarters is currently located, and maintain the Bucyrus brand for the principal Bucyrus legacy products.

The closing of the transaction is subject to regulatory approvals, customary closing conditions and approval by Bucyrus stockholders. At that time, Caterpillar Group President Steve Wunning will have executive office accountability for Bucyrus, along with his current responsibilities for the company’s mining business.

According to Caterpillar, a driving motivation for the transaction is the company’s estimate of more than USD 400 million in annual synergies beginning in 2015 derived from the combined financial strength and complementary product offerings of the combined mining equipment businesses.

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