Caterpillar Inc (CAT) agreed to buy German company MWM Holding, a maker of engines that can run on alternative fuels, for 580 million euros ($810 million).

MWM engines operate on fuels including diesel, biogas, and industrial waste gas, and can be used to generate electricity, Caterpillar said in a statement. The company is based in Mannheim, Germany.

"This is a natural complement to Caterpillar's existing diesel and gas power generation business and demonstrates our commitment to continued investment in sustainable products and industries," CEO Doug Oberhelman said.

The deal is expected to close in "the coming months."

MWM will become part of Caterpillar's Electric Power Division, which supplies generator sets and integrated power systems for the generation, control and supply of electricity.

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