Caterpillar attempts $886M Chinese bid

IRJ – November 11 –International mining and earthmoving giant Caterpillar has made a bid to purchase Chinese coal mining manufacturer ERA Mining Machinery, for US$886 million.

The deal values ERA at approximately $577 million to $885 million, and offers Caterpillar the opportunity to build its geographical presence in China and add to its coal industry offering; two fronts that the group has been actively pursuing.

According to Steve Wunning, the company’s president who presides over its offering in the resource sectors, ERA is a good option because it “underscores Caterpillar’s long-term commitment to continue to invest in China in order to support our growing base of Chinese customers.”

ERA’s subsidiary responsible for servicing the coal mining industry is Zhengzhou Siwei Mechanical & Electrical Equipment Manufacturing, otherwise known as Siwei.

“We intend to build on Siwei's strong reputation and relationships in China, further investing in its mining roof support business and operations, while utilising Caterpillar's global reach and organisation to help bring Siwei's products to more customers outside of China,” Wunning stated.

In July, Caterpillar completed an $7.6 billion acquisition deal for U.S.-headquartered mining machinery house Bucyrus International in the deal which took the company to the top in terms of the largest mining equipment makers in the world. Caterpillar’s front running competition comes in the form of Joy Global—the mining equipment major who announced in July that it will purchase 41 per cent in  International Mining Machinery, of China for $585 million.

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