HELSINKI — Finland’s Konecranes has agreed to buy Terex’s cranes business for ports and factories for $1.3 billion, in a move that cancels a planned full merger and allows the U.S. firm to pursue talks with a rival suitor.Konecranes and Terex, which has engineering employees in Cedar Rapids and crane manufacturing operations in Waverly, agreed to an all-share merger in August, hoping a deal would help them better cope with cooling Chinese and weak European demand.But the deal was challenged in January when Terex received a non-binding cash bid from China’s Zoomlion Heavy Industries Science & Technology Co., which later sweetened its offer to $3.4 billion.“The agreement provides Terex with the ability to continue to pursue discussions with Zoomlion,” Terex said in a statement Monday.Under the new Konecranes deal, Terex will become a 25 percent shareholder in the Finnish company and Konecranes will aim for annual synergies of about 140 million euros within three years of buying Terex’s Material Handling & Port Solutions (MHPS) business.“The Chinese intervention of course changed the picture, but if this deal goes through, I don’t think it is any worse than the initial one,” chief executive Panu Routila told reporters.He said the deal would improve Konecranes’ growth prospects, especially in its services business as it could help it to win larger outsourcing deals from customers.“Both companies got what they wanted,” said Inderes Equity Research analyst Juha Kinnunen, who has a “reduce” rating on Konecranes stock.“Compared with the estimated value for the whole company, the price seems high for just one business.
Comment on Konecranes scraps full Terex merger
Local News from TheGazette.com, The Gazette (Cedar Rapids)
Mon, 05/16/2016 - 11:03am
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