Terex Corp. has signed a definitive agreement to sell its mining business to Bucyrus International Inc. for $1.3 billion in cash. The products to be divested by Terex in the transaction include hydraulic mining excavators, electric drive mining trucks, track and rotary blasthole drills, and the highwall miner, as well as the related parts and aftermarket service businesses, including the company-owned distribution locations. The transaction, which is subject to customary regulatory approvals, is expected to close in the first quarter of 2010.

“This transaction accelerates the transformation of Terex Corp. as we move from a construction and mining equipment company to a machinery and industrial products business,” says Ronald DeFeo, Terex chairman and chief executive officer. “Going forward, we will focus on products and services where we can maintain and build superior customer propositions with high returns on capital for our owners. The current environment plus this transaction provide an excellent opportunity to create value. We plan to execute the changes needed to make this happen.”

DeFeo emphasizes, “The sale of Mining to Bucyrus is good for customers, team members and shareholders. It is a classic proposition that strengthens the mining business for its customers and team members. For Terex, the attractive cash offer provides us excellent financial flexibility, as our cash balance will substantially equal our outstanding indebtedness. The approximately $1 billion of after-tax proceeds will allow Terex to invest in its current, high return-on-capital businesses, or to look to add new, well-positioned niche manufacturers with strong market presence to the company’s portfolio.

DeFeo continues, “Mining is a highly capital intensive business. It would take us years to build the infrastructure to service and support new equipment sales in many of the key mining markets around the world where Bucyrus already has significant presence. We are confident that both companies’ stakeholders will benefit from the transaction, with our mining customers being the ultimate beneficiaries. The journey to make this a great business will accelerate under the leadership of Bucyrus, which has a historically strong presence in surface mining with its rope shovel and dragline products.”