Terex and Konecranes have called off their proposed merger after Chinese equipment manufacturer, Zoomlion, increased its bid for Terex to US$31 per share. Konecranes has instead agreed to buy Terex’s Material Handling and Port Solutions (MHPS) business for a total consideration of US$1.3 billion/€1.126 billion.
Terex MHPS is a supplier of industrial cranes, crane components and services under the Demag brand. It also suppliers port technology under several brands, including Gottwald. The business generated US$1.542 billion/€1.391 billion in sales in 2015 with earnings of US$111 million/€100 million.
“For Konecranes, this acquisition is a milestone in building our future,” said Konecranes Chairman, Christoph Vitzthum. “The acquisition makes it possible for us to realize a long list of synergies and we expect it to create substantial value for our customers and shareholders.”
Konecranes will pay US$825 million/€723 million in cash and issue Terex with 19.6 million new non-voting shares to cover the acquisition. Terex will own 25% of Konecranes following completion of the transaction.
“The sale of the MHPS business to Konecranes is good for our customers, team members and shareholders,” said John L. Garrison, Terex President and CEO. “It will significantly reduce Terex’s debt levels, improves out balance sheet and gives us better longer-term financial flexibility.”
The agreement also allows Terex to continue its negotiations with Zoomlion and includes a clause providing Terex the right to terminate the agreement before the end of May for a fee of US$37 million if Terex and Zoomlion agree on a sale of Terex as a whole.
“This new transaction structure offers other substantial benefits to Terex shareholder,” continued Garrison. “Importantly, the transaction locks in the benefits of the MHPS sale while preserving the ability for Terex to continue discussions with Zoomlion on a potential sale of the company.”
The transaction is subject to customary regulatory approvals and the approval of Konecranes’ shareholders. It is expected to close in January 2017.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/handling/20052016/terex-and-konecranes-call-off-merger-2016-819/