Konecranes is to acquire the Demag overhead and Gottwald port crane division of Terex as the two agree to end all merger talks.

Konecranes is to acquire the Demag overhead and Gottwald port crane division of Terex as the two agree to end all merger talks.

Terex has agreed to sell its industrial and port crane services business – largely the Demag overhead crane and Gottwald port cranes business - to Finland's Konecranes. At the same time the two companies have mutually agreed to end all merger talks.

Konecranes is paying $1.3 billion for the business, made up of $820 million in cash and 19.6 million newly issued shares in Konecranes. The deal will give Terex a 25 percent stake in the expanded Konecranes business, and it will have the right to nominate two directors. The deal is expected to complete at the end of the year. This deal can be called off any time up to the end of May - with a $37 million penalty - if a deal is struck with Zoomlion to acquire the Terex business as a whole before then.

The agreement frees Terex to pursue its discussions with Zoomlion in a deal that might be both more manageable and incur fewer regulatory hurdles. The Terex Konecranes had revenues of around €2.13 billion last year, the Terex port and material handling division will add around €1.39 billion.

Terex chief executive John Garrison said: “The sale of the MHPS business to Konecranes is good for our customers, team members and shareholders. This transaction is expected to be accretive to Terex earnings per share and preserves the strategic logic for the original merger of equals. 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. As a 25 percent shareholder of Konecranes, Terex will also be able to share in the dividends, synergies and economic upside of the combined business.”

“This new transaction structure offers other substantial benefits to Terex shareholders as well. 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 at $31 per share with the MHPS business or, alternatively, for the sale of Terex without the MHPS business.”

Source: Vertikal

This story also appears on Crane Equipment Guide.

Today's top stories

Construction Market Boosts Economy

Bobcat Company Donates $885,000 in Equipment to Support Salvation Army's Disaster Relief Efforts

VIDEO: KEMROC Expands; Plans to Increase Nationwide Presence

'Machinery Pete' Interviews Jack Lyon On RFD TV

VIDEO: First of Two Sections of NYC's $1.45B East Side Coastal Resiliency Project Is Complete

John Deere Construction Introduces Flexible Customer Training Options

INFRA Grant Moves Ohio's N. Coast Connector Project Steps Closer

Ohio Gov. Announces Millions for Local Bridge Improvements