Terex To Zoomlion: No Deal
By pdamon27 May 2016
In what may be one of the final twists in the fascinating saga of Terex Corp., the company announced that it has terminated discussions with Chinese equipment giant Zoomlion Heavy Industry Science and Technology Co. regarding its proposed purchase of Terex Corp., either with or without the Material Handling and Port Solutions (MHPS) segment.
“The Board of Directors and Management of Terex worked diligently to determine if an appropriate transaction with Zoomlion, beneficial to Terex shareholders, was achievable,” said David A. Sachs, chairman of Terex. “Unfortunately, after many months of discussions, Zoomlion was unable to provide a fully financed, binding proposal for the purchase of Terex with or without MHPS. This ends the prolonged period of uncertainty that this process has brought to Terex and its customers, team members and shareholders.”
At the same time, Terex announced that the sale of the MHPS business to Finland’s Konecranes will proceed. The sale of MHPS to Konecranes for approximately $1.3 billion, which was first announced May 16, is subject to customary regulatory approvals and the approval of the shareholders of Konecranes, and is expected to close in January 2017.
“The sale of the MHPS business to Konecranes will now proceed,” said John L. Garrison, Terex president and CEO. “This transaction represents excellent value realization for our shareholders and also provides certainty for our MHPS customers and team members. We expect this sale to be accretive to Terex’s earnings per share. The proceeds will significantly reduce Terex’s debt levels and improve our balance sheet, providing us with the ability to buy back shares and invest in our remaining businesses. As a 25% shareholder of Konecranes, Terex will be able to share in the synergies and economic upside of the combined MHPS and Konecranes businesses.”