15.11.2010

CAT buys Bucyrus

Caterpillar announced that it has agreed to buy Bucyrus International for $7.6 billion in cash, while assuming all of its debt, effectively valuing the deal at $8.6 billion.

Caterpillar is offering $92 a share, a premium of 32 percent over Bucyrus’s closing price on Friday. The deal follows Bucyrus’ $1.3 billion takeover of Terex Mining earlier this year which was recently the subject of a law suit following an attempt by Bucyrus to revalue the deal after the fact.

The Bucyrus acquisition announced earlier today is by far the largest ever attempted by Caterpillar. Douglas Oberhelman, Caterpillar’s chief executive said: “For several years, mining customers have been asking us to expand our range of products and services to better serve their increasingly complex requirements. This announcement says to those customers, we heard you loud and clear. It is a strong statement about our belief in the bright future of the mining industry.”

Cat says it will pay for the acquisition using cash from its balance sheet and debt. It will also sell up to $2 billion in shares to finance the deal.