Caterpillar Inc. and Terex Corporation announced that they have reached a non-binding
agreement in principle for Caterpillar to acquire Terex’s worldwide electric drive mining truck business, and for Terex to acquire Caterpillar’s 5000-Series mining shovel intellectual property.
Their respective Boards of Directors have authorized commencement of due diligence and the negotiation of a definitive agreement.
Caterpillar will acquire Terex’s eight-model line of DC and ACelectric drive mining trucks. The trucks will continue to be sold under the familiar Payhauler and Unit Rigbrand names, and will be distributed and supported through Caterpillar dealers worldwide.
Terex will purchase the intellectual property, including patents and designs, for Caterpillar’s 5110B, 5130B and 5230B models of hydraulic excavator mining shovels.
Under a marketing agreement, Terex will continue to manufacture seven-model O&K line of hydraulic mining shovels for distribution and service through the dealer network.
Caterpillar dealers also will assume responsibility for supporting the existing population of O&K shovels.
In separate transactions, certain Caterpillar dealers will purchase Terex’s wholly owned product support businesses relating to Payhauler and Unit Rig mining trucks and O&K mining shovels.
"This transaction will provide customers with a full line of mining shovels matched with mechanical and electric drive trucks," commented Gerald L. Shaheen, group president, Caterpillar Inc. "By repositioning these product lines, we provide the best value to customers with a full range of equipment coupled with the unparalleled sales and product support expertise offered by the global Caterpillar dealer network."
Thys de Beer, President, Terex Mining, said, "In the near term, we remain focused on our customers to ensure that the transition of support and service will be seamless."
Caterpillar has been a global leader in developing mining trucks designed specifically for high production mining and construction applications. "Expanding the product offering to include electric drive trucks will broaden our ability to respond to customer needs for efficiency and productivity in their mining operations," said Richard A. Benson, president of Caterpillar’s Global Mining Division and Caterpillar Inc.
Caterpillar will assemble its remaining shovel inventory and then cease manufacturing of 5000-Series mining shovels. Cat dealers will continue to provide ongoing technical and product support for 5000-Series shovels already in the field. "We are fully committed to supporting all users of Cat 5000 shovels so they receive full value from their equipment," Benson commented.
"Caterpillar and Terex intend to realign these businesses in order for each to concentrate on their strengths," commented Ronald M. DeFeo, Terex chairman and chief executive officer. "Terex has been a long-time global leader in mining shovels. We have one of the largest populations of hydraulic mining shovels in the field and a reputation for a durable product that has been meeting industry needs for decades. Now this product offering is strengthened even further with distribution and support through the global Caterpillar dealer network."
The completion of these transactions is subject to a number of contingencies, including satisfactory due diligence, regulatory review and the execution of a definitive agreement. Financial terms will not be disclosed pending such execution.