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WORLD NEWS

Caterpillar to buy Bucyrus to gain big shovels and draglines

In a dramatic move to become a full liner in big mining machinery, Caterpillar has announced its intention to buy Bucyrus International. This action will bring Caterpillar not only the big walking draglines and large rope operated shovels for which Bucyrus is renowned but also the large O&K and Unit Rig derived ranges of large hydraulic mining excavators and electric drive mining trucks which Bucyrus bought from the Terex Corporation late last year.

This 290 tonne Terex O&K derived RH120C - seen here at Bauma 2010 - is one of six large hydraulic excavators in the Bucyrus range that is being acquired by Caterpillar.

Having originally missed out on gaining the large O&K technology from Terex, Caterpillar had announced that it would develop its own big hydraulic mining excavators. Caterpillar has not had big mining excavators in its line-up since 1993 when it discontinued its 180 tonne 5130B and 360 tonne 5230B models.

Now Caterpillar is paying approximately $8.6 billion to acquire Bucyrus in a deal which, subject to regulatory approvals is expected to close in mid-2011. Caterpillar states that it intends to locate its mining business headquarters in South Milwaukee, Wisconsin, where the Bucyrus headquarters is currently located, and maintain the Bucyrus brand for the principal Bucyrus legacy products.

The classic Bucyrus products include walking draglines (including the 7,000 tonne flagship 8750 with a maximum bucket capacity of 116m³) and large rope operated shovels like the 1740 tonne 495HF2 with a 37.0 to 50.0m³ bucket capacity range. The six large O&K derived large hydraulic excavators in the Bucyrus portfolio extend up to the RH400 which weighs 980 tonnes and can be used with buckets in the capacity range of 37.0 to 50.0m³.

The five Unit Rig derived mining trucks in the Bucyrus range have MTU or Cummins engines and electric drive. They have capacity ratings from 150 to 400 tons and they currently compete in the market with Caterpillar's own mechanical drive six model range mining trucks that have capacities from 100 to 400 tons.

    As well as giving Caterpillar the widest range of big mining machinery, the Bucyrus acquisition will bring opportunities for greater use of Cat engines and components. Caterpillar dealers - some of which already sell the large Bucyrus hydraulic mining excavators - will also gain by being able to offer a broad, one-stop shop for global mining customers.

By buying Bucyrus, Caterpillar will extend its product portfolio to include giant walking draglines sized up to this 7,000 tonne 8750.

Caterpillar Chairman and CEO Doug Oberhelman says, "Our performance through the global economic turmoil of 2008-2009 allowed us to emerge with a strong balance sheet and the ability to make strategic investments in companies like Bucyrus. This, and other recent acquisitions, will position Caterpillar for industry leadership and will be positive for our stockholders, customers and employees."

Tim Sullivan, Bucyrus President and CEO, says, "This is an outstanding and financially compelling transaction for our shareholders. . More fundamentally, it is a testament to the tremendous value our talented team of employees has created over the past several years and to the strength of our brand in the global mining machinery marketplace. I am confident that we have found an excellent partner in Caterpillar." [CP&E]

Caterpillar

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