Caterpillar and Bucyrus International have received notification from the US Department of Justice (DOJ) that it has closed its investigation into Caterpillar’s planned acquisition of Bucyrus. The DOJ action, in addition to the expiration of the Hart-Scott-Rodino Act waiting period, concludes the antitrust review process in the US. The clearance by the DOJ will allow the acquisition, valued at approximately $8.6 billion (including net debt), to proceed as soon as all other conditions to closing have been satisfied. The transaction is expected to close in mid-2011. The implifications of this acquisition were considered in detail in IM, December 2010.
“We were very pleased to hear this positive news from the Department of Justice about this strategic acquisition,” said Caterpillar Chairman and CEO Doug Oberhelman. “Since we announced our plan to acquire Bucyrus last November, we have continued to hear from our customers that this complementary expansion of our mining product range is what they have been looking for from Caterpillar. This will position us to better serve the increasingly complex requirements of those customers,” Oberhelman added.
Cat says the acquisition is based on its key strategic imperative to expand its “leadership in the mining equipment industry, and position Caterpillar to capitalise 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 industrialising their economies.”
Tim Sullivan, Bucyrus President and CEO, said, “This is a critical and important step as we move toward closing this historic transaction that will deliver tremendous value to all the Bucyrus stakeholders.”
Caterpillar will fund the acquisition through a combination of cash from its balance sheet and debt. Caterpillar does not plan to issue equity to help pay for the acquisition.