Caterpillar to Acquire Bucyrus International

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 Milwaukee, Wisconsin, 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.

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