DOW JONES NEWSWIRES Caterpillar Inc. (CAT) has agreed to sell a distribution-and-support business in South Africa and Botswana to Barloworld Ltd. (BAW.JSE) for about $115 million, as the company continues to shed distribution units from recently acquired Bucyrus. The deal also assigns to Barloworld agreements with Eqstra NH Equipment (Pty) Ltd. and Eqstra Botswana (Pty) Ltd. to buy that company's Bucyrus distributorship and mining-services businesses in South Africa and Botswana. The total transaction, expected to close in the third quarter, is valued at about $175 million. Caterpillar--the world's sales leader in bulldozers, excavators and other earth-moving machinery--in July bought mining-equipment manufacturer Bucyrus for about $7.6 billion, and since then has made a series of deals to sell off portions of that company's distribution businesses. Cat has said its long-held strategy has been for its dealers to service and sell all its products. Since Bucyrus used a direct model to sell and support products, Caterpillar said it would transition that distribution-and-support system to dealers. "We're pleased to announce this agreement today as we continue to make good progress on our transition of the product distribution and support of former Bucyrus machinery to Cat dealers around the world," said Caterpillar group president Steve Wunning. Barloworld is a South Africa-based brand-management company. Upon the deal's closing, Barloworld will provide sales, service and support for Bucyrus equipment in all its dealership territories in southern Africa. Chief Executive Clive Thomson said the acquisition is in line with the company's growth strategy. About 470 former Bucyrus and Eqstra employees and contract workers are expected to transition to Barloworld after the transaction closes. The two companies are continuing in discussions regarding former Bucyrus distribution-and-support businesses in the Barloworld dealership territories in Russia and Iberia. Caterpillar said it continues to hold discussions with other Cat dealers with mining activity in their territories. Caterpillar shares were down 1.3% in premarket trading to $91.34. The stock is up 2.1% so far this year. -By Kristin Jones; Dow Jones Newswires; 212-416-2208; kristin.jones@dowjones.com
