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June 02, 2010

EMD sold to Caterpillar subsidiary

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CATERPILLAR subsidiary Progress Rail Services says it has signed a definitive agreement to purchase US locomotive manufacturer Electro-Motive Diesel (EMD) for $US 820 million from private equity groups Berkshire Partners and Greenbriar.

Upon completion of the deal, which is expected by the end of the year, EMD will become a wholly-owned subsidiary of Progress Rail. EMD will continue to be based in La Grange, Illinois, and Mr John Hamilton will remain in his position as president and CEO.

"This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry," said Caterpillar vice chairman and CEO-elect Mr Doug Oberhelman. "Including today's announcement and our acquisition of Progress Rail, Caterpillar has invested about $US 2 billion since 2006 to grow our profitable rail and transit businesses. We see a positive long-term future for the continued growth of the rail industry."

EMD traces its roots back to 1922 and, becoming part of General Motors in 1930. It was sold to Berkshire and Greenbriar in 2005. In addition to its core North American market, EMD has exported diesel locomotives to more than 70 countries around the world, and has established production sites in India and China, where it works with local partners.

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