Terex said Dec. 10 it has ended talks with Caterpillar regarding the sale of Terex’s mining truck business to Caterpillar and Terex’s acquisition of Caterpillar’s mining shovel intellectual property. The discussions ended due to an inability to come to financial terms satisfactory to both parties, Terex said in a press release.
The two companies said July 1 they had reached a non-binding agreement in principal for the deal.
“The complexity of this transaction, coupled with a need to sell various distribution entities to third party Caterpillar dealers, shifted too much of the risk to Terex shareholders, and I felt this outweighed the strategic logic of the transaction,” said Ronald DeFeo, chairman and chief executive of Terex.
The companies’ boards of directors authorized commencement of due diligence and the negotiation of a definitive agreement this past summer, but both equipment makers cautioned completion of the deal was subject to a number of contingencies.
If the transaction had been successful, Caterpillar would have acquired Terex’s eight-model line of DC and AC electric-drive mining trucks. The trucks would have continued to be sold under the Payhauler and Unit Rig brand names, and would have been distributed and supported by Caterpillar dealers.
Terex would have purchased the intellectual property for Caterpillar’s 5110B, 513B and 5230B models of hydraulic excavator mining shovels. Under a marketing agreement, Terex would have continued to manufacture its seven-model O&K line of hydraulic mining shovels for distribution and service through the Caterpillar dealer network.
Caterpillar dealers would have purchased Terex’s product support businesses relating to Payhauler and Unit Rig mining trucks and O&K mining shovels.