TOKYO: Caterpillar Inc, the world's largest heavy machinery maker, said it would spend 36.5 billion yen (about $450 million) to take full control of its Japanese joint venture to strengthen its expansion in Asian markets.
The Peoria, Illinois based company said it would buy out Mitsubishi Heavy Industries Ltd's remaining one-third stake in Caterpillar Japan Ltd, which makes hydraulic excavators and other earthmoving equipment. The deal is expected to close in the April-June quarter.
The two companies set up a 50-50 joint venture in 1963. Caterpillar, which competes with smaller Japanese rival Komatsu Ltd, raised its stake to two-thirds in 2008.
The latest decision reflects Caterpillar's strategy to focus on competing in emerging markets of Asia and the Commonwealth of Independent States, Rich Lavin, group president in charge of construction industries and growth markets, said in a statement.
The company's chief executive, Doug Oberhelman, told reporters previously that he expects record sales and profit this year as economic activity in China and the United States picks up.
In 2011, Caterpillar booked revenue of $14.99 billion in the Asia-Pacific region, or about a quarter of its total $60.14 billion, according to its financial statement.
By comparison, Komatsu booked sales of 1.176 trillion yen ($14.53 billion) when combining Japan, China, and Asia-Oceania sales for the year ended March 2011, its most recently completed full financial year. That was nearly two-thirds of its total annual sales of 1.843 trillion yen ($22.77 billion).
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