Bucyrus purchase part of strategy to tap into growing commodities market
PEORIA, Ill.—U.S. regulators have cleared Caterpillar Inc.’s $8.6-billion acquisition of Bucyrus International, Inc.
Caterpillar is the largest maker of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
The company also provides financial, logistics and remanufacturing services.
makes surface mining equipment for coal, copper, iron ore, oil sands and other minerals.
Caterpillar will pay for the acquisition through a combination of cash from its balance sheet and debt. The purchase, which includes net debt, is expected to close by mid-2011. Caterpillar expects to save about $400 million a year from the acquisition, starting in 2015.
The Peoria, Ill. company is also planning to locate its mining business headquarters in Milwauke, Wis., where Bucyrus is situated. It will maintain the Bucyrus brand on principal products.
“Even today at mine sites around the world, our customers are using Bucyrus shovels to load Caterpillar mining trucks,” said Steve Wunning, Caterpillar Group president.
Wunning said the acquisition will further expand Caterpillar’s mining equipment products base, adding it’s part of the company’s strategic plan to capitalize on the long-term outlook for commodities.
Growth in emerging markets are improving infrastructure, rapidly developing urban areas and industrializing their economies, Wunning said.
Caterpillar forecasts that the global economy will grow about 3.5 per cent this year, while developing regions will expand at about double that rate.
The company also recently announced the opening of a 215,278 square foot remanufacturing facility in Singapore for major components for large off-highway trucks and other mining equipment, including engines, transmissions, final drives and torque converters.
Canadian company Finning International Inc. is the world’s largest Caterpillar heavy equipment dealer with 13,600 employees at the end of 2008, supplies giant dump trucks and other equipment to mining companies, oilsands operators, construction companies and others around the world.