Doosan Infracore to acquire Bobcat
DOOSAN Infracore are to acquire Bobcat, the world’s largest compact construction equipment business, from Ingersoll-Rand (I-R) for US$4.9 billion. The deal, which also includes the sale of I-R’s utility equipment and attachment businesses, is the largest overseas acquisition ever made by a South Korean company.
Between them, the three I-R businesses have an established network of over 2,700 dealers in the US and Europe and operate 16 manufacturing plants in six countries around the globe. In 2006 the businesses generated approximately US$2.6 billion in sales and US$370 million in operating profits, and they currently maintain the highest world market share in their respective business sectors.
Doosan Infracore say the primary objective of the acquisition is to enhance their overall product portfolio by adding compact construction equipment to their existing medium and large construction equipment product lines and to help expand and strengthen Doosan Infracore’s global manufacturing and sales networks.
Upon completion of the transaction, which is expected to take place in the fourth quarter of 2007, Doosan Infracore will have a combined network of over 3,700 dealers worldwide and 20 manufacturing plants in countries such as the US, China, Belgium, France and the Czech Republic, and the company’s sales will almost double to approximately US$7.4 billion.
This will improve the company’s worldwide ranking from 19th to 7th in the construction equipment sector, and by making maximum use of synergies from the acquisition, Doosan Infracore say their aim is to rank among the top five construction equipment companies by 2010.
Ingersoll-Rand are selling Bobcat to reduce their exposure to the continuing downturn in the US house building sector. The deal comes some four months after I-R sold their road-building equipment business to Volvo for US$1.3 billion and marks ‘the last major action’ to reposition the company to focus on the climate control, industrial and security markets.