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Caterpillar Subsidiary to Acquire Electro-Motive Diesel, Creating Global Locomotive Manufacturing and Rail Services Company

Progress Rail Services, a wholly-owned subsidiary of Caterpillar, has signed a definitive agreement to purchase Electro-Motive Diesel (EMD) for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC. Upon completion of the transaction, EMD will become a wholly-owned subsidiary of Progress Rail.

This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry. 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.

—Caterpillar Vice Chairman and CEO Elect Doug Oberhelman

Progress Rail Services is one of the largest providers of rail and transit products and services in North America, including: locomotive upgrade and repair, railcar remanufacturing, trackwork, rail welding, rail repair and replacement, signal design and installation, maintenance of way equipment, parts reclamation and recycling.

With 2009 revenues of $1.8 billion, EMD has the largest installed base of diesel-electric locomotives in the world and offers the most extensive range of locomotive products in the rail and transit industry.

The acquisition is expected to close by the end of 2010, pending final regulatory approvals. EMD will remain headquartered in LaGrange, Ill.

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