Progress Rail Services has agreed to pay $820 million in cash for Electro-Motive Diesel (EMD), a designer and manufacturer of diesel-electric locomotives for all commercial railroad applications. It is one of two domestic OEMs in the diesel-electric railroad sector.
Progress Rail Services is a wholly owned subsidiary of Caterpillar Inc. that remanufactures locomotive and railcar products. It is one of the largest providers of rail and transit products and services in North America.
"This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry," stated Caterpillar vice chairman and CEO-elect Doug Oberhelman. "Including today's announcement and our acquisition of Progress Rail, Caterpillar has invested about $2 billion since 2006 to grow our profitable rail and transit businesses. Rail has proven to be a highly efficient and sustainable method for moving freight and people, and we see a positive long-term future for the continued growth of the rail industry."
Progress Rail CEO Billy Ainsworth said "the acquisition of EMD will enable us to provide rail and transit customers an industry-leading range of locomotive, engine and emissions solutions, as well as unmatched aftermarket product and parts support and a full line of rail-related services and solutions."
EMD has the largest installed base of diesel-electric locomotives in the world, and claims to offer the most extensive range of locomotive products in the rail and transit industry.
"We feel this is an ideal fit for EMD and our customers and we look forward to developing and providing an even greater portfolio of products and services for the rail and transit industry that we have proudly served for more than 85 years," stated EMD president and CEO John S. Hamilton.
The acquisition is expected to close by the end of 2010, pending final regulatory approvals.