Caterpillar, Navistar Agree to China Venture

WARRENVILLE, Ill. (TheStreet) -- Caterpillar and Navistar agreed to form a joint venture with a Chinese manufacturer to build commercial trucks for the Chinese market.

The companies made the announcement after the bell Monday, confirming earlier reports that discussions between the parties had begun.

The agreement hasn't been officially inked, however. In fact, the companies don't expect to seal the deal until the middle of next year.

The proposed joint venture would be 50-50 between Anhui Jianghuai Automobile and the Navistar-Caterpillar team, called NC2, which aims to build and market Navistar's International and Caterpillar's Cat brand commercial trucks in markets outside North America.

The venture, which will use Jianghuai's manufacturing plants and NC2's "technology know how," may also create a research-and-development unit in China, the companies said in a press release.

Caterpillar shares were trading Tuesday afternoon at $51.80, down 0.7%, while Navistar shares were moving at $37.43, down 2.2%.

-- Written by Scott Eden in New York

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