Caterpillar's $810 Million Acquisition of German Engine Manufacturer MWM

On October 22, 2010, Caterpillar (CAT) announced that it will acquire German engine manufacturer MWM Holding GmbH from British private equity firm 3i, trading at US$580 million (US$810 million) in cash.

Caterpillar said the deal will help it expand its supply to customers in the power generation sector. MWM's full name is Motoren-Werke Mannheim, which produces internal combustion engines using natural gas, specialty gases, and diesel.

There have been major changes in institutional funding, and Caterpillar is investing in several projects to expand its production capacity. In early 2010, the company acquired railroad vehicle manufacturer Electro-Motive Diesel. The company stated that 3i’s return on investment in MWM will exceed 25%.

After obtaining regulatory approval, the acquisition is expected to be completed in the coming months.