January 20, 2011 / 11:37 AM / 9 years ago

U.S. seeks more details on Caterpillar-Bucyrus deal

BANGAL0RE/NEW YORK (Reuters) - U.S. antitrust regulators are seeking more information on Caterpillar’s (CAT.N) proposed $7.6 billion acquisition of Bucyrus BUCY.O that would seal its position as the world’s largest maker of mining equipment.

The companies received a request — often referred to as ‘second request’ — for additional information and documentary material from the antitrust division of the U.S. Department of Justice, Bucyrus said in a filing with the U.S. Securities and Exchange Commission.

The Caterpillar-Bucyrus deal will leave Joy Global JOYG.O as the last remaining stand-alone U.S.-based maker of mining equipment.

The proposed Bucyrus deal is Caterpillar’s biggest acquisition in its 85-year history, and it would expand the company’s already considerable offering of mining equipment, helping diversify the company away from a still-lagging U.S. construction sector.

Bucyrus shareholders are set to vote on the deal later on Thursday in a special meeting.

Mining equipment is a $40 billion global market facing increased capital investment amid soaring commodity prices, driven by demand from China. Recovering economies, meanwhile, could spur demand for coal to generate electricity.

Miners especially need new equipment as they target new mines, so-called green-field projects, rather than expanding in existing, “brown-field,” locations.

Analysts have said they expect the deal to face little regulatory objection since there is minimal overlap between the two companies’ product lines.

According to the merger agreement, the companies agreed to sell some assets, rights, product lines and licenses to win antitrust approval. Caterpillar would receive a $200 million termination fee if the deal were to fall through.

“This is not unexpected and we’re still on schedule for a mid-2011 closing, as we were a couple of months ago,” CEO Doug Oberhelman said on CNBC television on Thursday.

Bucyrus shares fell slightly in pre-market trade. They closed at $90.24 on Wednesday on Nasdaq.

Reporting by A.Ananthalakshmi in Bangalore and Nick Zieminski in New York; Editing by Joyjeet Das and Derek Caney

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