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Part of its ongoing strategy to increase its exposure to the Chinese market, Caterpillar will purchase a minority interest in SEM, which is believed to hold about 8% of the domestic market, and retain an option to buy the remainder after two years.
"In finalising this deal, Caterpillar has reached another significant milestone in increasing our presence in China, better serving our customers here and becoming the leading provider of equipment to what now represents the world's fastest growing construction equipment market economy," Asia Pacific operations vice president Richard Lavin said.
The deal comes a month after new Australian construction equipment distributor King Equipment announced it had brokered a deal to distribute SEM and China Construction International Development Co equipment in Queensland, New South Wales and Western Australia.
The ambitious plan put together by local businessman Siegfried Konig, King's chief executive, will see the company launch a $2.5 million fund raising venture to kick-start an Australia-wide distribution operation.
Caterpillar, the world's largest supplier of construction equipment with 2003 annual sales exceeding $US22 billion, operates 10 facilities and employs about 2000 people in China.
