Peoria, Ill.-based Caterpillar Inc. and Finning International last week announced that Caterpillar and O.E.M. Remanufacturing Company, a subsidiary of Finning, have reached agreement for Caterpillar to acquire OEM Reman's rail and non-Cat engine component remanufacturing business, together with related work-in-progress and inventory.

In addition, Caterpillar and OEM Reman agreed to enter into an initial two-year agreement under which OEM Reman will provide remanufacturing services to Caterpillar for these lines of business. Caterpillar will provide all sales and marketing functions and OEM Reman will perform the remanufacturing work for the initial term of the agreement.

The transaction does not affect the remanufacturing work that OEM Reman performs for Finning (Canada) on Cat-branded equipment. OEM Reman will continue to perform remanufacturing services under a long-term contract for Finning (Canada) in support of their customers in western Canada.

"This transaction demonstrates the confidence that Caterpillar has in Finning as a business partner and in OEM Reman's ability to perform to Caterpillar's stringent quality requirements and aggressive production targets in a safe, cost-effective manner," said Doug Whitehead, president and CEO of Finning International.

"OEM Reman brings proven expertise in the remanufacture of industrial components, and has a valued reputation in markets that we are well positioned to serve," said Steve Fisher, Caterpillar vice president with responsibility for remanufacturing.

Caterpillar, one of the world's largest remanufacturers, announced in 2004 that its remanufacturing group would offer its capabilities to original equipment manufacturers in other industries, including automotive and industrial products. Caterpillar has entered a number of strategic alliances with OEMs and remanufacturers to expand its presence in external remanufacturing markets.

OEM Reman is a North American engine and powertrain component remanufacturing provider, serving the mining, rail, construction and forestry sectors. OEM Reman operates from a new, state-of-the-art 286,000-square-foot facility in Edmonton, Alberta.

Finning International is one of the world's largest Caterpillar equipment dealers. The Company sells, rents, finances and provides customer support services for Caterpillar equipment and engines in Western Canada, the U.K., and South America. Finning also owns Hewden, the largest equipment rental business in Europe. Headquartered in Vancouver, British Columbia-based Finning is No. 17 on the RER 100.