Caterpillar Inc. News
Caterpillar, Mitsubishi Heavy Industries and Shin Caterpillar Mitsubishi Announce Definitive Agreement For Japanese Joint Venture
The definitive agreements were signed at a ceremony in
The estimated value of the first phase of the share redemption is 50 billion JPY. Under the terms of the agreement, SCM will redeem half of MHI's shares in SCM. Once the share redemption is completed, Caterpillar will own 67 percent of the outstanding shares of the business, and MHI will own the remaining 33 percent. SCM also has an option, exercisable after five years, to redeem the remaining shares owned by MHI, which if exercised, would make Caterpillar the sole owner of SCM.
"This is a strategic decision for Caterpillar, and it is an important part of our comprehensive business strategy for competing and winning in the rapidly expanding emerging markets of Asia and the Commonwealth of Independent States," Owens said. "Our joint venture with Mitsubishi Heavy Industries has been remarkably successful, and moving forward, I'm confident that as SCM is fully integrated with Caterpillar's core operations, our customers will see greater benefits from this agreement," Owens said.
The 50-50 joint venture between Caterpillar and Mitsubishi Heavy Industries was formed 44 years ago.
"Although MHI's shareholding stake in SCM will decrease as a result of the change in ownership structure, MHI intends on further enhancing its value by strategically focusing its management resources on MHI's core competency businesses with high growth potential," said Kazuo Tsukuda, President of Mitsubishi Heavy Industries. "The trusted relationship we cultivated with Caterpillar over the years will be maintained and further developed after this transaction."
SCM is primarily involved in the manufacture and sale of Caterpillar branded hydraulic excavators, wheel loaders and track-type tractors. SCM also owns several retail and rental stores that provide Caterpillar products and services in key markets in
"SCM and its employees are proud to be part of Team Caterpillar, and this agreement will allow SCM's manufacturing, design and process expertise to be fully leveraged across the global Caterpillar enterprise," said Hirano.
The agreement also outlines terms for the continuation of the broad-based business relationship between Caterpillar and Mitsubishi Heavy Industries following the share redemption. The two companies will continue their long-term relationship with a separate joint venture to manufacture and market Caterpillar and Mitsubishi branded lift trucks, and they will also continue a relationship in which MHI provides engines for some Caterpillar products.
About Caterpillar:
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2007 sales and revenues of
About Mitsubishi Heavy Industries:
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in
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SOURCE Caterpillar Inc.
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