Caterpillar spending $ 7.6 billion on Bucyrus mining equipment

Bucyrus mining equipment has accepted a deal for a full purchase of their business. Caterpillar gear manufacturers will be investing $ 7.6 billion for the purchase. Caterpillar already has manufacturing companies that build diesel engines to big machines. With this purchase, Caterpillar could be expanding substantially. The business will now contain mining gear.

Exactly what Bucyrus is

Not many know exactly what Bucyrus is. As a mining-equipment manufacturer, it isn't well known. In South Milwaukee Wis., Bucyrus is located. It has about 7,000 employees and in 2009 did regarding $2.65 billion in business. Underground and on the surface, it manufactures equipment for mining. It’s for mining all precious metals for instance copper, coal and gold. Everything including the Panama canal has used Bucyrus equipment for digging.

What Caterpillar is willing to spend for Bucyrus

For the last few years, Bucyrus has been trying to expand. DBT GmbH and Terex Mining both made deals with Bucyrus in 2007 and 2010. Bucyrus is a publicly owned business, and stockholders will be becoming $92 a share from Caterpillar. It is a good deal thinking about it is above exactly what Bucyrus stocks were trading for. It’s 30 percent above actually. The deal will require cash through a payday loan no faxing to finance the $7.6 billion deal. Equity and debt could be needed too. Caterpillar is relying for the “cheap financing” from low interest rates available in banks.

The Bucyrus/Caterpillar deal information

The deal between Bucyrus and Caterpillar is orchestrated in such a way that Caterpillar might be able to take advantage of the growing business of mining and the world’s heavy appetite for metals, rare-earth minerals and mined merchandise. The products sold the first time at Bucyrus only pays for regarding one 3rd of its income. The other 2 thirds come from after-market parts and services that are sold. There is a major growth industry there. Caterpillar will now work in it. This may also help vertically integrate Caterpillar — meaning the company won’t only provide the trucks and large equipment for mining websites however the equipment that could be pulling minerals out of the ground.

Articles cited

Cat.com

cat.com/products/

Bucyrus

bucyrus.com/news/article/20101115_71755.aspx

Wall Street Journal

blogs.wsj.com/deals/2010/11/15/caterpillar-deal-everything-you-wanted-to-know-about-bucyrus/