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Caterpillar, DaimlerChrysler to Launch Vehicle Parts, Fuel Systems Ventures

November 23, 2000|From Reuters

CHICAGO — Caterpillar Inc., the world's No. 1 maker of construction and mining equipment, and the commercial vehicle unit of Germany's DaimlerChrysler said Wednesday they have agreed to form a global alliance to make vehicle parts.

Under the 50-50 alliance, the companies said, they will form two joint ventures, one to develop and manufacture medium-duty engines and parts and another to develop and manufacture fuel systems. Both will sell their products to their parent companies as well as third-party customers.

Sales volume of the engine joint venture is anticipated to grow "significantly" by mid-decade from a level of about $2 billion for the combined parent companies in 2000. Sales volume of the fuel systems venture is expected to nearly triple by mid-decade from a level of about $600 million.

The agreement, signed Tuesday after four years of talks, provides the framework for a number of joint ventures, supply agreements and cooperative projects, subject to the consent of U.S. and European regulators.

Shares in Caterpillar were down 44 cents to $37.81, about halfway between their 52-week high and low at $55.13 and $29, on the New York Stock Exchange.

Shares in DaimlerChrysler were up 23 cents to $39.08, near their 52-week low of $37.90, on the NYSE.

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