Caterpillar Lowers Cost Of Chinese Acquisition

The Wall Street Journal 16 May 2013
Caterpillar Inc. CAT +1.12% said Thursday that it has reduced the cost of its purchase of a Chinese mining equipment firm that prompted the U.S. machinery giant to take a big write-down following alleged accounting “irregularities.”
The company said it had reached a settlement to resolve disputes arising from its $700 million purchase of ERA Mining Machinery Ltd., cutting its outstanding obligations on the deal by $135 million.
Caterpillar took a $580 million write down in January on the 2012 deal, alleging that its target’s value had been inflated by accounting irregularities from unnamed parties.
Caterpillar has agreed to pay $29.5 million instead of the $164.5 million owed under the original deal to former ERA directors Emory Williams and John Lee, and James Thompson III, who is Mr. Lee’s son-in-law and was an ERA investor.
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