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Bucyrus acquires Terex Corp’s mining equipment business

World Coal,


Bucyrus International Inc. has announced that it has signed a definitive agreement to acquire the mining equipment business of Terex Corp. for US$ 1.3 billion in cash. Terex may request to receive US$ 300 million of the purchase price in the form of Bucyrus shares (based on Bucyrus’ current trading price). According to the company, the transaction will create a premier supplier of mining equipment, offering a comprehensive product portfolio comprising walking draglines, electric rope shovels, hydraulic excavators, off-the-highway haul trucks, highwall miners, underground longwall, room-and-pillar and transport machinery, and a full line of drills and belt systems for all mining applications.

Bucyrus is a world leader in the design and manufacture of high productivity mining equipment for surface and underground mining. The mining equipment business of Terex produces the world’s largest hydraulic excavators, rugged haul trucks, advanced drilling machines, and highwall mining systems. The Terex mining equipment business has 38 facilities around the world with approximately 2,150 employees. As a result of the transaction, Bucyrus will double its addressable market from roughly US$ 15 billion to over US$ 30 billion and create a team of approximately 10,000 people in nearly 100 locations around the world.

Under the terms of the agreement, approved by the Boards of Directors of both companies, Bucyrus will acquire those subsidiaries and assets of Terex Corp. used to design, manufacture and sell hydraulic excavators, surface mining trucks, drills (other than auger 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 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 Q1 of 2010.

In addition to the benefits to be received by customers, the acquisition is expected to yield significant benefits for Bucyrus shareholders. Bucyrus estimates that there are over US$ 100 million/year in run-rate operating synergies, achievable by 2012. A substantial portion of the synergies will come from the integration of the company’s global manufacturing facilities and leveraging manufacturing centers of excellence as well as engineering and product development resources. Additional cost savings are expected to come through combining management functions and reducing purchasing expenses, similar to Bucyrus’ successful integration of DBT following its acquisition in May 2007.

Read the article online at: https://www.worldcoal.com/coal/11012010/bucyrus_acquires_terex_corp%E2%80%99s_mining_equipment_business/

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