To further strengthen its presence in Asia,
Caterpillar Inc.
(
CAT
) announced that it will become the sole owner of their 50-50
joint venture in Japan, Caterpillar Japan Ltd, for a total deal
value of 36.5 billion JPY ($450 million). The takeover is expected
to be completed in the second quarter of 2012.
The Japanese alliance goes back more than 45 years when
Caterpillar and Mitsubishi formed the joint venture known as
Caterpillar Mitsubishi. In 1987, following expansion, the venture
was rechristened as Shin Caterpillar Mitsubishi. On completion of
the first phase of the redemption plan in 2008, Caterpillar became
the majority shareholder in Shin Caterpillar Mitsubishi and the
business has henceforth been known as Caterpillar Japan Ltd.
The decision to integrate the Japanese operations into
Caterpillar is in line with Caterpillar's vision of growing its
presence in the rapidly expanding emerging markets of Asia and the
Commonwealth of Independent States. Full ownership of Caterpillar
Japan Ltd will help the company better serve its customers with a
broader range of products and services and in turn become a market
leader in this region.
Caterpillar's operations in Japan include major manufacturing
centers in Sagami and Akashi. The Sagami unit will be transformed
into a high-tech component facility. Akashi mainly manufactures
hydraulic excavators and is also Caterpillar's hydraulic excavator
design center, providing the design for Caterpillar's hydraulic
excavator product line globally. Caterpillar also owns several
dealers and rental companies that cater to the Japanese
markets.
Caterpillar's strong brand name, pricing power and global dealer
network put it in a vantage position to capitalize on the growing
need for infrastructure development worldwide. We believe
Caterpillar's expansion plans of opening new facilities and
furthering existing operations, particularly in emerging markets,
will boost its long-term potential.
Furthermore, its biggest acquisition to date, Bucyrus, will not
only enhance its product line and increase its presence in the
emerging markets, but also strengthen its position as the top
mining equipment manufacturer in the U.S. As a result, the company
currently retains a Zacks #2 Rank on the stock, equivalent to a
short-term rating of Buy.
Peoria, Illinois-based Caterpillar Inc. is the manufacturer of
construction and mining equipment, diesel and natural gas engines,
and industrial gas turbines. The company is one of the few leading
U.S. companies in an industry that competes globally from a
principally domestic manufacturing base. Caterpillar operates two
divisions - Machinery and Power Systems (M&PS) and Financial
Products. Caterpillar competes with the likes of
CNH Global NV
(
CNH
),
Komatsu Ltd
.
(
KMTUY
) and
Volvo AB
(
VOLVY
).
CATERPILLAR INC (
CAT
): Free Stock Analysis Report
CNH GLOBAL NV (
CNH
): Free Stock Analysis Report
VOLVO AB ADR B (
VOLVY
): Free Stock Analysis Report
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