Caterpillar sets up parts JV with China Liyuan

BEIJING/NEW YORK (BestGrowthStock) – Caterpillar Inc (CAT.N: ) has agreed to team up with a subsidiary of China’s AVIC Heavy Machinery Co (600765.SS: ) to design and manufacture medium- to heavy-duty hydraulic pumps and motors.

Caterpillar did not disclose the size and share holding structure of the tie-up between its China branch and AVIC Liyuan Hydraulics in a brief statement.

Components made at the venture will supply Caterpillar and other construction equipment producers, it said.

The deal, pending approval of the Chinese regulators, marks the latest expansion of global industry giants in China where demand for construction gear has been strong fueled by Beijing’s massive investment in infrastructure.

Caterpillar previously had a small venture with the state parent of XCMG Construction Machinery Co (000425.SZ: ), but bought out the 15.9 percent it did not already own in the tie-up earlier this year.

(Reporting by New York Equity Desk, Fang Yan and Ken Wills in Beijing; Editing by Jacqueline Wong)

Caterpillar sets up parts JV with China Liyuan