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Caterpillar said in a statement that it is cooperating with law enforcement and that it believes the search is related to an IRS investigation of parts transactions carried out by its Swiss affiliate from 2007 to 2012.

The U.S. Attorney's office for the Central District of IL confirmed search warrants were executed at Caterpillar locations in Peoria, East Peoria, and Morton.

"The lawsuit alleged the company shifted profits overseas and to offshore shell companies to avoid paying more than $2 billion in US taxes". She declined to comment further on the details of the investigation.

Shares of Caterpillar were down more than 4 percent to about $94 in midday trading.

"While the warrant is broadly drafted, we believe the execution of this search warrant is regarding, among other things, export filings that relate to the CSARL matter first disclosed in Caterpillar's Form 10-K filed on February 17, 2015, and updated in Caterpillar's most recent Form 10-K filed with the SEC on February 15, 2017", the press release reads.

The subsidiary in Switzerland was the focus of a 2014 investigation by the U.S. senate alleging it was set up to shift billions of profits overseas to avoid paying taxes in the US.

"We now believe the ultimate disposition of this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations", Caterpillar said in its 10-K.

Caterpillar said it was unable to predict the investigation's outcome or potential losses. "The 99-page document was titled 'Caterpillar's Offshore Tax Strategy.' The report alleges Caterpillar used the subsidiary to avoid paying $2.4 billion in taxes over a period of 13 years", the member station reported.

Neither the IRS nor the U.S. Department of Commerce's Office of Export Enforcement was immediately available for comment.

The Peoria Journal Star newspaper reported that law enforcement officials were seen entering Caterpillar's headquarters.

It said it was considering closing two more major production facilities, including one in Aurora, Illinois, and also announced it was moving its corporate headquarters from Peoria to Chicago this year.