Caterpillar has made a preconditional offer to acquire all issued shares of ERA Mining Machinery of Hong Kong, for an estimated value of HK$6.8bn (US$885m).
ERA designs, manufactures and sells underground coal mining equipment through its subsidiary Zhengzhou Siwei Mechanical & Electrical Equipment Manufacturing in China.
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Caterpillar has offered two options for the acquisition of ERA, which includes an all-cash alternative to acquire the shares in consideration for HK$0.88 (US$0.11) cash per each share.
The second option is a loan note alternative, which will entitle the loan note holder to receive a minimum of HK$0.75 (US$0.096) and up to HK$1.15 (US$0.14) per loan note upon redemption.
The offer values ERA at between HK$4.49bn (US$577m) and HK$6.8bn (US$885m) on a fully diluted basis.
Siwei possesses a manufacturing base of 600,000m2 in Zhengzhou, Henan province, where it manufactures and sells roof support equipment to underground mining customers in China.
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