Bucyrus International Inc. will stay in Milwaukee County despite Monday’s announcement that the mining equipment maker is being bought by Caterpillar Inc., officials say.
But whether Bucyrus will be based in South Milwaukee or Oak Creek is uncertain, and officials in both communities say it doesn’t matter as long as the jobs remain.
“Whether it’s South Milwaukee or Oak Creek, the better way to look at it is we’re locating to the greater Milwaukee area,” said Jim Dugan, Caterpillar spokesman. “A lot of these things will be looked at before the transaction closes, but the broader point is Caterpillar is coming and Bucyrus is not leaving.”
The companies announced that Peoria, Ill.-based Caterpillar, the world’s largest construction and mining equipment maker, would acquire Bucyrus in a deal valued at $8.6 billion including debt. Caterpillar will pay $92 per share for Bucyrus, a 32 percent premium to Bucyrus’ closing price on Friday. The acquisition is expected to be finalized by mid-2011, Dugan said.
For more than 100 years, Bucyrus has called South Milwaukee home. Company officials announced this year that the company would shift its headquarters to the former Midwest Airlines property in Oak Creek.
Caterpillar officials said Monday that the company’s worldwide mining headquarters would move to South Milwaukee, but Dugan said that announcement is based on Bucyrus’ current location and no long-term headquarters has been determined.
South Milwaukee Mayor Thomas Zepecki said he learned about the deal the same time as everyone else.
“It kind of shocked me (Monday) morning when I was watching the news,” he said. “I didn’t have any inclination this was happening.”
Zepecki said whether Bucyrus’ headquarters is in South Milwaukee or Oak Creek is less important than having the company maintain — and possibly increase — its 1,500 jobs across southern Milwaukee County.
South Milwaukee loaned Bucyrus $12 million four years ago to expand its plant operations and increase jobs. Zepecki said he did not think the acquisition would prevent Bucyrus from paying off the loan.
Oak Creek, on the other hand, is in negotiations with Bucyrus to establish a tax-incremental financing district to help the company with its new corporate campus on the former Midwest Airlines site. TIF districts let municipalities borrow money to subsidize developments and pay for utility and street work that serves projects. Communities then use new taxes generated by the projects to pay off the debt.
Doug Seymour, Oak Creek’s director of community development, said Bucyrus moved its executive operations to Oak Creek with the understanding that the city would provide financial incentives for moving.
“I think their roots are still in South Milwaukee, so it’s just a matter of where they call their headquarters home,” Seymour said, adding that he expected the TIF to be created and Bucyrus to have a presence at the former Midwest Airlines site. “They have an incredibly significant presence in both communities, and what they put on the letterhead is not a huge deal to us.”
Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said the company’s headquarters will not hurt area development opportunities as long as jobs aren’t lost.
“It has to be looked at on a regional basis, so it doesn’t matter if it’s Oak Creek or South Milwaukee,” Ruzicka said. “The people who work there don’t all live in South Milwaukee, so it’s not that big of a deal.”