TOKYO (AP) -- Japanese machinery maker Mitsubishi Heavy Industries said Wednesday that it will reduce its 50-50 stake in a joint venture with Caterpillar Inc. of the U.S.
Under the deal, Caterpillar, based in Peoria, Illinois, will boost its stake in the Japanese construction machinery joint venture, Shin Caterpillar Mitsubishi Ltd., in an effort to expand its Asian business.
Mitsubishi will sell a 25 percent stake in the joint venture for 50 billion yen (US$500 million; euro321 million) to the joint venture Shin Caterpillar -- a move that will raise Caterpillar's stake in the joint venture to 67 percent.
Shin Caterpillar has an option to buy the rest of the stake after five years, Mitsubishi said in a statement.
Caterpillar, the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines, has been in talks with Mitsubishi since February of last year about taking a majority stake in the 50-50 joint venture.
By selling the stake in the joint venture, Mitsubishi hopes to focus more on its core businesses, including power generation plants, nuclear power and aerospace.
Caterpillar and Mitsubishi formed the 50-50 joint venture Shin Caterpillar Mitsubishi 44 years ago, which made and sold Caterpillar branded hydraulic excavators, wheel loaders and track-type tractors. It also owns several retail and rental stores that provide Caterpillar products and services in Japan.
Mitsubishi's other partnerships with Caterpillar such as forklifts will continue unchanged, according to Mitsubishi.
