Caterpillar in giant bid for engineers Bucyrus

Image caption, Caterpillar's purchase of Bucyrus will create a global equipment giant

Caterpillar, the world's largest construction and mining equipment maker, has agreed to buy Bucyrus International for $7.6bn (£4.75bn).

Bucyrus, which makes mining equipment, generates a third of its business in the developing world.

Caterpillar said last month its third-quarter profit doubled, thanks in large part to growth in those markets.

The deal will create a huge global supplier of trucks, hydraulic shovels, blasting drills and mining equipment.

US-based Caterpillar will also assume $1bn of fellow north American company Bucyrus' debt.

The new company will be well placed to take advantage of the strong demand from emerging markets like China and India for commodities.

Shares of Bucyrus rose 30% on news of the deal, which has been approved by both company boards.

It still needs approval by regulators and Bucyrus shareholders.

Caterpillar made deep cuts during the recession - action which the chairman and chief executive of the company, Doug Oberhelman said had put it in a good position to make investments of this kind.

"Our performance through the global economic turmoil of 2008-09 allowed us to emerge with a strong balance sheet and the ability to make strategic investments in companies like Bucyrus," said Mr Oberhelman.

Caterpillar said last month it expects the global economy to grow by about 3.5% next year, but it said developing regions will grow at about double that rate.

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