Caterpillar Inc. (CAT) said it agreed to sell a distribution and
support business in Peru to Ferreyros SAA (FERREYC1.VL) for about
$75 million, allowing Caterpillar to continue to shed distribution
units from recently acquired Bucyrus.
The deal includes inventory in Peru and 70 employees, who are
expected to transition to Ferreyros.
Caterpillar--the world's sales leader in bulldozers, excavators
and other earth-moving machinery--in July bought mining-equipment
manufacturer Bucyrus for about $7.6 billion, and since then has
made a series of deals to sell off portions of Bucyrus's
distribution businesses. Cat has said its long-held strategy has
been for its dealers to service and sell all its products. Since
Bucyrus used a direct model to sell and support products, Cat said
it would transition that distribution and support system to
dealers.
"Our agreement with Ferreyros marks the next step in our journey
to transition product distribution and support of former Bucyrus
machinery to Cat dealers around the world," Steve Wunning,
Caterpillar group president, said. "We're making good progress on
our journey."
Caterpillar said it continues to hold discussions with other Cat
dealers that have mining activity in their territories and will
continue to operate the former Bucyrus distribution business until
the transitions have occurred in a given territory.
Earlier this month, Seven Group Holdings Ltd. (SVW.AU) said its
WesTrac heavy machinery unit agreed to buy Bucyrus distribution and
support businesses from Caterpillar in several parts of Australia
for about $400 million. In January, Finning International Inc.
(FINGF, FTT.T) said it has agreed to buy part of the Bucyrus
distribution business for about $465 million. In December, Cat said
the industrial division of Sime Darby Bhd (4197.KU) acquired a
portion of Bucyrus's distribution business in Australia, Papua New
Guinea and New Caledonia for about $360 million.
In January, Caterpillar said its fourth-quarter earnings jumped
and the company predicted that demand for its construction and
mining equipment will remain strong this year despite the slow
recovery in construction in the U.S. and Europe.
Shares were up 1.1% to $107.06.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108;
ben.rubin@dowjones.com