Peoria, Ill.-based Caterpillar and the commercial vehicle unit of Germany-based DaimlerChrysler will develop, manufacture and market medium-duty engines and fuel systems for third-party customers and for use in their own products.

The agreement provides the framework for a number of joint ventures, supply agreements and cooperative projects.

In other news, Caterpillar signed an agreement to purchase Hindustan Motors' earthmoving equipment division in Tiruvallur, India, for $72.2 million. The deal includes two manufacturing plants and Hindustan's engineering and education centers.

Cat officials said the company plans to manufacture off-highway trucks, wheel loaders, track-type tractors, wheel loaders and backhoe loaders at the plants.

Hindustan's earthmoving division employs about 1,400 people and has an annual sales turnover of $71.8 million.