NEW YORK (AP) — Caterpillar Inc., the world's largest construction and mining equipment maker, said Monday it has agreed to buy Bucyrus International Inc. for $7.6 billion, aiming its sights on rapid growth in emerging markets.
Bucyrus, which is based in South Milwaukee, Wis., makes surface mining equipment used for mining coal, copper, iron ore, oil sands and other minerals. Growth in emerging markets like China, India and Brazil has driven profit many companies as growth in the rest of the world remains slow.
Caterpillar said last month it expects the global economy to grow by about 3.5 percent next year, on par with economists' forecasts. But the company predicts developing regions will grow at about double that rate.
The purchase price works out to $92 per share, a 32 percent premium to Bucyrus' closing price on Friday. Bucyrus shares climbed 30 percent to $90.35 in pre-market trading, while CVaterpillar lost $1.16 to $79.88.
The deal, which is valued at $8.6 billion including debt, is expected to close in mid-2011.
The deal requires approval by regulators and Bucyrus shareholders.
"For several years, mining customers have been asking us to expand our range of products and services to better serve their increasingly complex requirements," Caterpillar Chairman and CEO Doug Oberhelman said in a statement. "This announcement says to those customers, we heard you loud and clear."