PEORIA, Ill. & WESTPORT, Conn.--(BUSINESS WIRE)--July 1,
2003--Caterpillar Inc. (NYSE: CAT) and Terex Corporation (NYSE: TEX)
announced that they have reached a non-binding agreement in principle
for Caterpillar to acquire Terex's worldwide electric drive mining
truck business, and for Terex to acquire Caterpillar's 5000-Series
mining shovel intellectual property.
Their respective Boards of Directors have authorized commencement
of due diligence and the negotiation of a definitive agreement.
Caterpillar will acquire Terex's eight-model line of DC and AC
electric drive mining trucks. The trucks will continue to be sold
under the familiar Payhauler and Unit Rig brand names, and will be
distributed and supported through Caterpillar dealers worldwide.
Terex will purchase the intellectual property, including patents
and designs, for Caterpillar's 5110B, 5130B and 5230B models of
hydraulic excavator mining shovels. Under a marketing agreement, Terex
will continue to manufacture its seven-model O&K line of hydraulic
mining shovels for distribution and service through the Caterpillar
dealer network. Caterpillar dealers also will assume responsibility
for supporting the existing population of O&K shovels.
In separate transactions, certain Caterpillar dealers will
purchase Terex's wholly owned product support businesses relating to
Payhauler and Unit Rig mining trucks and O&K mining shovels.
"This transaction will provide customers with a full line of
mining shovels matched with mechanical and electric drive trucks,"
commented Gerald L. Shaheen, Group President, Caterpillar Inc. "By
repositioning these product lines, we provide the best value to
customers with a full range of equipment coupled with the unparalleled
sales and product support expertise offered by the global Caterpillar
dealer network."
Thys de Beer, President, Terex Mining said, "In the near term we
remain focused on our customers to ensure that the transition of
support and service will be seamless."
Caterpillar has been a global leader in developing mining trucks
designed specifically for high production mining and construction
applications. "Expanding the product offering to include electric
drive trucks will broaden our ability to respond to customer needs for
efficiency and productivity in their mining operations," said Richard
A. Benson, President of Caterpillar's Global Mining division and
Caterpillar Inc. Vice President.
Caterpillar will assemble its remaining shovel inventory and then
cease manufacturing of 5000-Series mining shovels. Cat dealers will
continue to provide ongoing technical and product support for
5000-Series shovels already in the field. "We are fully committed to
supporting all users of Cat 5000-Series shovels so they receive full
value from their equipment," Benson commented.
"Caterpillar and Terex intend to realign these businesses in order
for each to concentrate on their strengths," commented Ronald M.
DeFeo, Terex Chairman and Chief Executive Officer. "Terex has been a
long-time global leader in mining shovels. We have one of the largest
populations of hydraulic mining shovels in the field, and a reputation
for a durable product that has been meeting industry needs for
decades. Now this product offering is strengthened even further with
distribution and support through the global Caterpillar dealer
network."
The completion of these transactions is subject to a number of
contingencies, including satisfactory due diligence, regulatory review
and the execution of a definitive agreement. Financial terms will not
be disclosed pending such execution.
About Caterpillar Inc.
For more than 75 years, Caterpillar Inc. has been building the
world's infrastructure and, in partnership with its worldwide dealer
network, is driving positive and sustainable change on every
continent. With 2002 sales and revenues of $20.15 billion, Caterpillar
is a technology leader and the world's leading manufacturer of
construction and mining equipment, diesel and natural gas engines and
industrial gas turbines. More information is available at www.cat.com.
About Terex Corporation
Terex Corporation is a diversified global manufacturer based in
Westport, Connecticut, with 2002 revenues of $2.8 billion. Terex is
involved in a broad range of construction, infrastructure, recycling
and mining-related capital equipment under the brand names of Advance,
American, Amida, Atlas, Bartell, Bendini, Benford, Bid-Well, B.L.
Pegson, Canica, Cedarapids, Cifali, CMI, Coleman Engineering, Comedil,
CPV, Demag, Fermec, Finlay, Franna, Fuchs, Genie, Grayhound,
Hi-Ranger, Italmacchine, Jaques, Johnson-Ross, Koehring, Lectra Haul,
Load King, Lorain, Marklift, Matbro, Morrison, Muller, O&K, Payhauler,
Peiner, Powerscreen, PPM, Re-Tech, RO, Royer, Schaeff, Simplicity,
Square Shooter, Telelect, Terex, and Unit Rig. Terex offers a complete
line of financial products and services to assist in the acquisition
of Terex equipment through Terex Financial Services. More information
on Terex can be found at www.terex.com.
SAFE HARBOR STATEMENT UNDER THE SECURITIES LITIGATION REFORM ACT
OF 1995
Certain statements contained in this press release are
forward-looking and involve uncertainties. Uncertainties include
whether the parties to the proposed transaction will be able to
negotiate a mutually satisfactory definitive agreement, whether the
necessary regulatory approvals will be obtained, whether the proposed
transaction will be consummated and whether the parties will realize
the anticipated benefits from the transaction.
CONTACT: Caterpillar Inc.
Lori T. Porter, 309/675-5813
LTPorter@Cat.com
or
Terex Corporation
Kevin O'Reilly, 203/222-5943
KOReilly@Terex.com
SOURCE: Terex Corporation and Caterpillar Inc.