Caterpillar, diesel engine--Caterpillar to Acquire German Sustainable Engine Maker for $810M

Caterpillar said Friday it plans to buy Germany’s MWM Holding from investor 3i for $810 million in an effort to provide customers with more sustainable products.

The announcement comes hours after the Peoria, Ill-based manufacturer reported a stronger-than-expected 97% gain in third-quarter profit of $792 million.

MWM, or Motoren-Werke Mannheim, a supplier of sustainable alternative engines, will add to Caterpillar’s sustainable power generation business.

Upon closing the all-cash deal, pending final regulatory approvals, MWM will join Caterpillar’s electric power division, which produces natural gas and diesel generator sets involved in the generation, control and supply of electricity.

“This a natural complement to Caterpillar’s existing diesel and gas power generation business and demonstrates our commitment to continued investment in sustainable products and industries,” said Doug Oberhelman, chief executive of the world's largest maker of construction and mining equipment. 

3i, which invested in MWM more than three years ago to launch its turnaround, will gain more than two-times return on its investment.

MWM Chairman Peter Grosch said the company “highly appreciates” 3i’s support and believes Caterpillar is the “best prospect” for its next stage of development, particularly given its global network which will open up new distribution and growth opportunities.

By Jennifer Booton