Caterpillar offers to buy China's ERA Mining Machinery for $885 million
11 November 2011
Caterpillar Inc, the world's biggest maker of earthmoving equipment, yesterday offered to buy China's manufacturer of underground coal-mining equipment ERA Mining Machinery Ltd, in a deal worth $885 million (HK$6.89 billion).
The offer will be made by Caterpillar (Luxembourg) Investment Co. S.A., a wholly owned subsidiary of Caterpillar Inc.
The proposed deal comes after Caterpillar made a $8.6-billion in cash acquisition of mining equipment maker Bucyrus International Inc last November, which transformed it into the world's biggest supplier of large mining equipment. (See: Caterpillar to acquire mining equipment maker Bucyrus for $8.6 billion)
Illinois-based Caterpillar, a Fortune 500 company, will pay 88 Hong Kong cents a share or a loan note that can be redeemed for 75 cents to HK$1.15. The offer, which values ERA between HK$4.49 billion to HK$6.89 billion, is 33 per cent more than ERA Machinery's last traded price.
The proposed acquisition is subject to regulatory approval by Chinese antitrust authorities.
Hong Kong-based ERA primarily designs, manufactures, sells and supports underground coal mining equipment in mainland China through its wholly owned subsidiary Zhengzhou Siwei Mechanical & Electrical Equipment Manufacturing Co., Ltd, better known as "Siwei".