Caterpillar has reached a tentative agreement with Claas Corp., Europe's leading maker of agricultural equipment and material handlers, to manufacture its telehandlers.

Cat would take over Germany-based Claas' factory in Suffolk, England, later this year. The telehandlers will continue to be marketed under the Claas name and sold in Europe through the Claas distribution network.

Caterpillar also recently received the green light from the Chinese government to open a paving product facility in China. Caterpillar Paving Products Xuzhou will manufacture a series of vibratory compactors in the 10- to 12- metric-ton class to be available later this year.

Said S.R. Ramseyer, vice president of Cat's Asia Pacific Division: "This investment further demonstrates Caterpillar's commitment to be a leading supplier of construction equipment to the Chinese market. We want to participate and help the massive road-building program planned by China's construction of its national trunk highway system."

Cat is the world's leading manufacturer of construction and mining equipment. It reported sales and revenue of $19.7 billion last year.