Mining equipment maker Bucyrus International Inc said yesterday that it will acquire a mining unit of Terex Corporation, the world's third biggest maker of heavy earth-moving equipment for $1.3 billion in cash.
Bucyrus, based in South Milwaukee, Wisconsin, a designer and manufacturer of high productivity mining equipment for the surface and underground mining like coal, copper, iron ore, oil sands and other minerals, said the acquisition would make it a "premier supplier of mining equipment."
Under the terms of the agreement, approved by the boards of directors of both companies, Bucyrus will acquire those subsidiaries and assets of Terex Corporation used to design, manufacture, and sell hydraulic excavators, surface mining trucks, drills, highwall miners, and related components, parts, and after-sales service, commonly known as O&K, Unit Rig, Reedrill, Superior Highwall, Halco, and Hypac.
The Westport, Connecticut-based Terex may request to receive $300 million of the purchase price in Bucyrus stock.
The acquisition, which is not subject to shareholder approval by either company, is subject to certain regulatory approvals and other customary closing conditions and is expected to close during the first quarter of 2010.
The acquisition is expected to yield significant benefits for Bucyrus shareholders since the company believes it can achieve $100 million in annual run-rate operating synergies by 2012.