Posts Tagged ‘truck’

Caterpillar to Acquire Bucyrus

November 16, 2010 2 comments

“Caterpillar Inc. (NYSE: CAT) and Bucyrus International, Inc. (Nasdaq: BUCY) announced today they have entered into an agreement under which Caterpillar will acquire Bucyrus International in a transaction valued at approximately $8.6 billion (including net debt). The acquisition is based on Caterpillar’s key strategic imperative to expand its leadership in the mining equipment industry, and positions Caterpillar to capitalize on the robust long-term outlook for commodities driven by the trend of rapid growth in emerging markets which are improving infrastructure, rapidly developing urban areas and industrializing their economies.”

Source: Caterpillar Press Release, November 16 2010


  • Bucyrus has a product portfolio including drills; draglines; shovels; excavators; mining trucks; highwall, longwall and room & pillar miners; and belt systems. This portfolio complements the position of Caterpillar, which is mainly strong in loaders and trucks in the mining industry. Sales are roughly equally divided over surface and underground mining equipment.
  • The offer worth $8.6bln is all cash, forcing Caterpillar to increase debt by approx. $5bln and equity by approx. $2bln. However, as Caterpillar is more highly leveraged than Bucyrus, the deal will actually help CAT to reduce leverage.


  • The premium of 32% will have to be justified by synergies that are mainly to be found in consolidation of the supply chain, dealer and service network and in the potential for increased revenues as the Caterpillar gains a stronger position to be the sole-source supplier of mines
  • The closing of the deal is subject to regulatory approvals, which might force Caterpillar to divest some assets in order to prevent a dominant position in several markets. Especially in the area of mining trucks the new company becomes a dominant player, as Bucyrus bought the mining division of Terex early this year.

©2010 | Wilfred Visser | BlogCatalog |

Equipment manufacturer profits jump

July 22, 2010 Comments off

” Caterpillar Inc.’s profit soared 91% as machinery sales increased sharply from last year. The company lifted its full-year earnings outlook again, now projecting $3.15 to $3.85 a share, up from $2.50 to $3.25, as it lifted the low end of its sales prediction by $1 billion.

‘We continue to be positive about the longer-term prospects for many of the industries we serve–like mining, energy, infrastructure, electric power and rail,’ said Chairman and Chief Executive Jim Owen. “

Source: Wall Street Journal, July 22, 2010


  • Volvo, Sandvik & Atlas Copco also reported increasing profits this week, mainly driven by growth of sales in BRIC countries.
  • Caterpillar announced a $700mln multi-year investment in a new line of mining shovels and capacity extension for mining trucks.
  • Caterpillar mentions a range of underlying growth figures driving the increased machinery sales: US non-metals mining growth of 6%; Canadian quarry growth of 2%; US coal production growth of 3%; Latin America mining output growth of 2%; 17% mining output growth in Brazil (44% for iron ore).


  • Equipment manufacturers profits decreased mainly due to reduced inventory levels of dealers. As many mining firms are more clear about the continuation of development projects after the crisis, inventory levels are picking up again.
  • The established players in the equipment arena are preparing for increasing competition from emerging countries. Not only mining production is shifting to the new world, mining suppliers will face new challenges too. Sourcing of supplies and parts from across the world and gaining trust of Chinese and Russian investors will become increasingly important.

©2010 | Wilfred Visser |