Caterpillar will fund the acquisition through a combination of cash from the balance sheet, debt and up to $2 billion in equity.  Caterpillar has noted that its mining customers have been asking it to expand the range of products and services to better serve their increasingly complex requirements.

Bucyrus is soaring by almost 30% at $90.35 in active trading.  What is interesting is that investors are treating this potentially as the first of several consolidation prospects in the mining equipment sector.  If you look at the Bucyrus competitors and others in the mining equipment space, the moves speak for themselves:

Joy Global, Inc. (NASDAQ: JOYG) is indicated up over 7% at $77.88; the 52-week range is (was) $42.45 to $76.72.

Terex Corp. (NYSE: TEX) is up over 8% at $26.40; its 52-week range is $16.79 to $28.71.

Manitowoc Co. Inc. (NYSE: MTW) is up over 4% at $11.67; its 52-week range is $8.48 to $16.43.

Bucyrus designs and makes equipment for mining of coal, copper, oil sands, iron ore, and other minerals in mining centers worldwide. The deal is apparently the largest of Caterpillar’s of the sort, although this is an easy integration for the company as Caterpillar had a market cap in excess of $48 billion.  Caterpillar shares are down 1.9% at $79.47 versus a 52-week range of $50.50 to $83.84.

JON C. OGG

Cramer’s Friday evening picks may have gotten some interest last year or even earlier this year, but these involve two companies which have already had their fair share of merger issues and non-events this year on top of the commodity bubble bursting.  Cramer believes that Rio Tinto (NYSE: RTP) should buy Alcoa (NYSE: AA) before the antitrust powers are able to actually block mergers.  Cramer also thinks BHP Billiton (NYSE: BHP) should go buy Freeport-McMoRan (NYSE: FCX) now that the forced selling has taken the stock down to $16.00 to take over the copper and minerals mining giant.

Yesterday Cramer said he’s like to see Illinois Tool Works (NYSE: ITW)buy Manitowoc (NYSE: MTW).  Cramer also thinks the time has come forNike (NYSE: NKE) to finally acquire Under Armour (NYSE: UA) now thesmaller company’s stock has been killed.

Wednesday, Cramer called for Pfizer (NYSE: PFE) to acquire Allergan(NYSE: AGN) now that Johnson & Johnson (NYSE: JNJ) decided to takeout Mentor Corp. (NYSE: MNT) for a huge premium.  Here was our own thought on the Allergan situation.

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Jon C. Ogg
December 5, 2008

He wants to see Illinois Tool Works (NYSE: ITW)buy Manitowoc (NYSE: MTW).  The companies got into a bidding war for acompetitor, but Manitowoc won and its stock has been ravaged.  ITWcould buy it for a pittance now since Manitowoc has been hit so hard.  Not all of the businesses overlap and itcould be a cheap merger that has a sweet revenge side to it.

Cramer also believes that the time has come for Nike (NYSE: NKE) tofinally acquire Under Armour (NYSE: UA) now the smaller company’s stock has beenkilled.  It was over $3 billion in market cap last year and barely $1billion now.  With Nike having over $2.6 billion in cash and spending$1 billion per year in buying its own stock back, Nike could take out acompetitor and take on another growth engine.

We agree that many larger companies should selectively do acquisitions.  Our only issue with this notion is that many of thebig stodgy cash-rich companies are in total lock-down or have goneentirely defensive.  The buyers cannot access loans right now and manyhave seen their lines of credit come under review or get cut. Ifthey have debt maturities coming due in the next 18 months they have tokeep the cash for that. The desire to do deals or to spend cash is frequently no different for big public companies than it is for Joe Public when times are tough.

Cramer said he”d have some more merger candidate picks Friday.

Jon C. Ogg
December 4, 2008

Hecla Mining (HL) Price of silver down. Sells off to $5.79 from 52-week high of $13.14.

The Manitowoc Company (MTW) Hurt by drop in Terex. Dips to $21.62 from 52-week high of $51.49.

Ciena (CIEN) Weak guidance. Plunges to $13 from 52-week high of $49.55.

Verisign (VRSN) Some investors still unhappy with last quarter’s numbers. Falls to $28.15 from 52-week high of $42.50.

Douglas A. McIntyre

Jon C. Ogg
November 9, 2007

Cramer tonight discussed where the wild bull markets are that you want to be in.  He has six bull markets.

1) Agriculture: the subsidies bring in $55 Billion in revenues to large farm companies alone. His 3 picks in this are Deere (DE), Monsanto (MON), and Sociedad QM (SQM).

2) Machinery: his pick is Caterpillar (CAT); Cramer also likes Terex (TEX) and likes Manitowoc (MTW), but he said CAT’s the best of breed pick and that’s the one he wants.

3) Infrastructure, perhaps the most wild bull market: the two cheapest after the big runs are Foster-Wheeler (FWLT) and McDermott (MDR), both of which he has been behind for large runs. All the asbestos issues are behind the companies and they are very undercovered on Wall Street.  Jacobs Engineering (JEC) is the runner up.

4) Aerospace: Cramer’s pick is Boeing (BA) as it should be up more than it is, particularly after Airbus woes.  He said he likes United Tech (UTX) but the best is Boeing and Boeing is now going north of $100.00.

Jon C. Ogg
May 29, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.