Terex sells mining unit for $1.3 billion

Terex Corp., the world's number three maker of heavy earth-moving equipment, is to sell its mining business to mining equipment maker Bucyrus International Inc. for $1.3 billion.  The Terex unit being sold includes hydraulic mining excavators and electric drive mining trucks. Its equipment, which is generally smaller than what Bucyrus specializes in, is used by mining companies to extract copper, coal, iron ore and other minerals. Westport, Connecticut-based Terex also makes aerial work platforms, cranes and construction equipment such as backhoes. Terex has 38 facilities around the world with approximately 2,150 employees. The mining unit registers approximately $1 billion in annual sales. South Milwaukee, Wisconsin-based Bucyrus said it estimates that there are more than $100 million in annual operating synergies that the acquisition could generate by 2012. The Terex division will expand Bucyrus into equipment used to mine commodities such as gold and diamonds and will also improve its operations in countries such as Indonesia, as well as giving it more access to western Australia. ÔÇ£We are extremely excited about acquiring Terex Mining and we believe that this is a unique opportunity to build an even stronger company for our customers, employees and shareholders,ÔÇØ said Tim Sullivan, CEO of Bucyrus, commenting on the deal. ÔÇ£Customers will reap benefits from this transaction as Bucyrus will be able to offer a broad, complementary product line that is driven by technology, quality, and first class service. Through our extended product offering, we will continue to design and produce world-class machines and provide the best after-market support throughout the life of the equipment. ÔÇ£We will expand our geographic footprint and diversify our portfolio of products across a broader range of commodities,ÔÇØ he continued. ÔÇ£Like Bucyrus, the Terex mining assets have a proud history powered by hard-working, loyal employees who are passionate about mining.ÔÇØ The acquisition, which is subject to regulatory approval, is expected to close in the first quarter of 2010. The deal is structured to be an all-cash transaction but Terex has the option to decide over the next few days to take $300 million in Bucyrus stock, instead of all cash. The US heavy equipment industry has been widely expected to consolidate of late, following a period of difficulty as a result of the worldwide economic crisis. Bucyrus was established in the 1880s, providing excavators and digging equipment for the construction of the Panama Canal. The company has annual revenues of about $2.75 billion and 7,200 employeesÔÇömany of whom are based at big manufacturing facilities in South Milwaukee, Houston and Germany. The company predominantly provides equipment to global mining giants such as Rio Tinto and BHP Billiton.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *