Terex and Konecranes propose merger
25 August 2015
The merger must still clear regulatory hurdles, but if it completes, the combined firm - Konecranes Terex - will boast annual sales in the region of $10bn.
The boards of Konecranes and Terex have reached agreement on an all stock 'merger of equals', with the combined company owned approximately 60% by Terex shareholders, and 40% by Konecranes shareholders. The deal is expected to close during the first half of 2016.
Under the agreement, Konecranes’ current chairman of the board will become the Konecranes Terex chairman and the Terex CEO will become the Konecranes Terex CEO. The nine-member board will include five directors to be nominated by Terex and four directors to be nominated by Konecranes.
The merger is believed to have been prompted by a lifting market slowdown and anticipation of increased competition from Chinese lifting equipment manufacturers, who are more aggressively seeking contracts outside their home market.
The two companies say the deal represents a 'combination of highly complementary businesses' but there are significant areas of overlap in product lines. Terex has a much broader range of products but both Terex and Konecranes have, for example, port solutions, from cranes to reachstackers. In addition, both firms have extensive lines of cranes and hoists for use in industrial applications.
The two companies have identified cross-selling opportunities, and it is easy to see how this may apply. For example, Konecranes does not have an aerial access solution and Terex is owner of the Genie brand.
It is anticipated Konecranes Terex will have the critical scale to drive technology innovation and provide customers with an industry-leading service offering.
Stig Gustavson, chairman of the Board of Konecranes, said: "The combination of Konecranes and Terex is a defining step in the history of both companies. With a focus on Lifting and Material Handling solutions, Konecranes Terex will be in an excellent position to deliver enhanced growth in revenues and margins through several strategic advantages, including significant cross-selling opportunities. There is a common culture between the two organisations, with both companies having long histories of designing competitive and innovative solutions. Together, we will have the opportunity to expand what Konecranes and Terex have built and become even stronger in the future.”
Terex CEO, Ron DeFeo, added: "This merger brings together two great businesses and through synergies provides another lever that is within our control to deliver value-creation to both the shareholders of Terex and Konecranes. We have a deep respect for Konecranes and look forward to joining forces with them to build a stronger and more diverse company that will be in an excellent position to succeed in a dynamic and highly competitive global industry.”