Caterpillar buys engine firm from 3i group for £515m

City A.M. Reporter
Caterpillar has agreed to buy MWM Holding, the German maker of gas and diesel engines, from British private equity firm 3i Group for about $810m (£515m) in cash.

Caterpillar's rich offer pre-empted a formal auction that was likely to have attracted a string of big strategic buyers, two people familiar with the matter said.

The agreement hands Caterpillar, the world's largest maker of earth-moving equipment, a company it has long coveted, having been out-bid by 3i three years ago, one of the people added.

It comes a day after Caterpillar's chief financial officer Ed Rapp told Reuters the company was prepared to use part of its $2.3bn cash pile to strike more deals, after agreeing an $820m acquisition in August.

And it follows General Electric Co's $3bn purchase earlier this month of Dresser Inc, a maker of gas engines used in oil production and mining.

MWM, or Motoren-Werke Mannheim, will become part of the Peoria, Illinois-based company's Electric Power division.