China's Zoomlion offers to buy US crane maker Terex for $3 bn
17 February 2016
China's Zoomlion Heavy Industry Science and Technology Co today said that it had made a buyout offer for Terex Corp, in a deal that value the US crane maker at about $3 billion.
The move comes six months after Terex and Finland-based Konecranes agreed to an all share merger in order to create a $10-billion company.
Zoomlion has offered to pay $30 per share, a 47 per cent premium to Terex's Tuesday's closing price.
Zoomlion plans to finance the deal with 40 per cent of its own cash and 60 per cent debt financing.
Terex, based in Connecticut, had on 26 January said that it had received an unsolicited, non-binding acquisition proposal from Zoomlion for $30.00 in cash. The proposal is conditioned on, among other things, receipt of US, Chinese regulatory and Zoomlion shareholder approval.
Tabling its proposal today, Zoomlion said that it believes the deal offers strategic benefits to both companies since Terex's main products are aerial work platforms, cranes and material handling equipment, while the Company's main products include construction machinery, environmental equipment and agricultural machinery.
Terex's market is mainly concentrated in the US and the European markets, while Zoomlion's presence is mainly in China and the emerging markets.
Post closing, the merged company will have a more comprehensive product chain and a global footprint.
Terex possesses advanced manufacturing knowhow and technology, whereas Zoomlion has abundant production capacity and manufacturing cost advantages.
The merged company will be able to realize production capacity synergies and optimize finance costs.
Terex is a lifting and material handling solutions company reporting in five business segments - aerial work platforms, construction, cranes, material handling & port solutions and materials processing.
It manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, manufacturing, shipping, transportation, refining, energy, utility, quarrying and mining industries.
It also provides financial products and services to assist in buying its equipment through Terex Financial Services.
Founded in 1992 and based in Hunan, Zoomlion manufactures high-tech equipment in the areas of agricultural, building, energy, environmental, and transport engineering.
The company has independent intellectual property rights in 11 major categories and 51 product lines, as well as nearly 1200 leading products.
Its subsidiaries include Italian construction equipment maker Compagnia Italiana Forme Acciaio SpA and British construction equipment manufacturer Powermole.
With annual revenues of nearly $4.2 billion, Zoomlion is the largest equipment manufacturing company in China and sixth largest in the world.