Konecranes to only buy Terex's Material Handling and Port Solutions business for $1.3 bn
17 May 2016
Finland's Konecranes yesterday said that it will buy Terex Corp's cranes business for ports and factories for €1.1 billion ($1.3 billion), instead of its earlier planned acquisition of the entire Connecticut-based company.
In August 2015, Terex and Konecranes agreed to an all share merger in order to create a $10-billion company.
But in January 2016, China's Zoomlion Heavy Industry Science and Technology Co made a $3 billion buyout bid for Terex and a month later raised its offer to $3.4 billion.
Under the terms of the revised offer, Terex is selling its Material Handling and Port Solutions business for $820 million in cash and 19.6 million shares of Konecranes. Post closing, Terex would own about 25 per cent of Konecranes and have the right to nominate two directors to its board.
The terms also provide Terex to continue to pursue discussions with Zoomlion for whole or part of the company.
The sale ''to Konecranes is good for our customers, team members and shareholders,'' John Garrison, Terex president and CEO, said in a statement. ''In addition, it will significantly reduce Terex's debt levels, improves our balance sheet and gives us longer term financial flexibility to invest in our business and buy back shares.''
Terex's main products are aerial work platforms, cranes and material handling equipment, and its market is mainly concentrated in the US and the Europe.
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.
Since Terex provides mobile harbor cranes in US ports that are seen as a critical part of the country's infrastructure, a deal with Zoomlion would automatically invite scrutiny from the Committee on Foreign Investment in the US.
With annual revenues of nearly $4.2 billion, Zoomlion is the largest equipment manufacturing company in China and sixth largest in the world.