Caterpillar Inc. (Peoria, IL) and Bucyrus International (Milwaukee, WI) have entered into an agreement under which Caterpillar will acquire Bucyrus International in a transaction valued at approximately $8.6 billion. The acquisition is based on Caterpillar's plan to expand its leadership in the mining equipment industry.
Under the terms of the
transaction, Bucyrus shareholders will receive $92 per share, $7.6 billion in
aggregate consisting of all cash. The transaction represents an implied premium
of 32 % to Bucyrus' share price as of November 12, 2010. Caterpillar will fund
the acquisition through a combination of cash from the balance sheet, debt and
up to $2 billion in equity. The transaction is expected to close in
mid-2011. Caterpillar intends to locate
its mining business headquarters in South
where Bucyrus headquarters are currently located, and maintain the Bucyrus
brand for the principal Bucyrus legacy products.
A driving motivation for the
transaction is Caterpillar's estimate of more than $400 million in annual
synergies beginning in 2015 derived from the combined financial strength and
complementary product offerings of the combined mining equipment businesses.
Caterpillar to Acquire Bucyrus International
November 16, 2010