The Mining Blog

Bucyrus International, Inc. of Wisconsin, USA has announced that it has signed a definitive agreement to acquire DBT GmbH. DBT is based in Lunen, Germany. Bucyrus will pay $710 million in cash and issue to RAG 471,476 shares with a market value of $21 million (based on Bucyrus average closing price for the 20-day trading period ended December 14, 2006).

The transaction is expected to be completed at the end of the first quarter of 2007 and is subject to customary closing conditions and regulatory approvals.

Bucyrus is a global leader in the design and manufacture of walking draglines, electric rope mining shovels and rotary blasthole drills used by the world’s surface mining industry.

DBT is a leading worldwide supplier of complete system solutions for underground coal mining. DBT manufactures equipment including roof support systems, armored face conveyers, plows, shearers and continuous miners used primarily by customers who mine coal.

The combined company, now serving both the surface and underground mining industries and with over 100 years of experience, will have a consolidated installed base of equipment of over $20 billion.

Tim Sullivan, President & Chief Executive Officer of Bucyrus said, “We are extremely excited about combining Bucyrus with DBT and we believe that this is a unique opportunity to jointly build a stronger company for our customers, employees and shareholders. Both companies share a similar culture and history with a focus on technology, delivering high quality products, valued employee relationships and providing first class service to our customers.”

Bucyrus will acquire DBT in a two-stage transaction. Bucyrus and the Hamburg Trust, a private German investor, have formed a holding company which will acquire DBT. Bucyrus owns 100% of the voting shares (representing 49.9% of the registered share capital) of the holding company, and the Hamburg Trust owns 100% of the non-voting shares (representing 50.1% of the registered share capital) of the holding company. Bucyrus is funding the purchase price and will be entitled to 100% of the dividends and cash flow of DBT. The parties have also entered into an irrevocable purchase agreement pursuant to which Bucyrus will acquire all of the holding company shares held by the Hamburg Trust by no later than 2009 for €8mm (half of which has been paid by RAG). Bucyrus and the Hamburg Trust will honor the prior commitments made by DBT with its German workers regarding facility and employee matters.

Bucyrus’ corporate headquarters and primary manufacturing facility is located in South Milwaukee, Wisconsin, USA.

Calvin Close
Managing Director
miningreference.com