NEW YORK - Caterpillar, the world's largest construction and mining equipment maker, moved aggressively to capitalize on demand in emerging markets Monday with a $7.6 billion buyout of Bucyrus International.
Bucyrus makes surface mining equipment used for coal, copper, iron ore, oil sands and other minerals.
With a less-than-robust economic recovery ongoing in the West, global companies like Caterpillar Inc. have driven further into China, India and Brazil, where the appetite for raw materials used in construction and mining is strong.
Caterpillar said last month that its third-quarter profit doubled, thanks in large part to growth in those markets.
With the Bucyrus deal, Caterpillar seeks to expand its footprint in countries that are "improving infrastructure, rapidly developing urban areas and industrializing their economies," the company said Monday. The deal also will significantly expand Caterpillar's line of mining equipment and double its mining revenue.
The CEOs of Caterpillar and Bucyrus said mining companies also will benefit from the deal because they'll be able to purchase much of their equipment and parts from a single supplier with less hassle and lower costs.
"This fits completely into the strategy of our customers," Bucyrus CEO Tim Sullivan said.
Both companies touted the deal at a news conference in South Milwaukee, Wis., where Bucyrus International Inc. is based and near where Caterpillar will set up the headquarters for its mining operations.
