Construction equipment maker Caterpillar Inc. (
) said Monday that it would buy mining equipment maker Bucyrus
International, Inc. (
) for a total of $8.6 billion, including $1 billion in debt.
The $92 per-share offer represents a 32% premium over BUCY's
Friday closing price of $69.62. The cash value of the deal is $7.6
billion, while CAT will also assume $1 billion in BUCY's debt.
Caterpillar will finance the deal with cash, debt, and up to $2
billion in equity. The companies said they expect the deal to close
in the middle of 2011.
Caterpillar CEO Doug Oberhelman commented, "For several years,
mining customers have been asking us to expand our range of
products and services to better serve their increasingly complex
requirements. This announcement says to those customers, we heard
you loud and clear."
Caterpillar shares fell $1.49, or -1.8%, in premarket trading
The Bottom Line
We recently removed Caterpillar (
) from our recommended list. The stock has technical support in the
$76-$77 price area. If the shares can firm up, we see overhead
resistance around the all-time high $84 price level.
Caterpillar Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
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