“Shares of Caterpillar, the world’s largest construction equipment manufacturer, are falling in pre-market trading today after the company announced a big writedown on Friday after the closing bell.
The $580 million charge announced by Caterpillar on Friday afternoon relates to an acquisition the company made in China last year. It paid $800 million for the company, Siwei, but the target company’s management team had apparently been fudging the books for quite some time, leading Caterpillar to wildly overpay for the acquisition.
BofA Merrill Lynch analyst Ross Gjilardi has a good summary of the writedown:
Big impairment charge tied to Siwei acquisition…”
