The combined company’s board will include five Terex directors and four Konecranes directors. The new company will maintain headquarters in Westport, Connecticut USA and Hyvinkää, Finland and is expected to have approximately 32,000 employees worldwide.
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The planned combination, with total sales of $10 billion in 2014, will at closing be owned 60 percent by the shareholders of Terex and 40 percent by Konecranes’ owners, the companies said.
The new company will be called Konecranes Terex and will be based out of Finland.
The new company will buy back $1.5 billion of stock and pay an annual dividend of $1.15 a share.
-Strong balance sheet and cash flow generation to support growth and return of capital to shareholders..
According to the companies’ joint statement, synergies of EUR110 million (USD121 million) will be achieved annually with an EBIT contribution of EUR32 million annually, but Konecranes chairman Stig Gustavson admitted that these will be matched in the first year by implementation charges.
“With a focus on Lifting and Material Handling solutions, Konecranes Terex will be in an excellent position to deliver enhanced growth in revenue and margins through several strategic advantages, including significant cross-selling opportunities”, Gustavson said in a statement.
“This merger brings together two great businesses”, said Terex CEO Ron DeFeo. There is a common culture between the two organizations, with both companies having long histories of designing competitive and innovative solutions.
Construction equipment, such as that made by Terex in Coventry, looks likely to become a non-core operation, thus putting a question mark over its long-term future ownership.
While rumours have circulated for some time regarding the possible disposal of one or more parts of Terex, we did not see this one coming.
The deal brings together Europe’s two biggest manufacturers of industrial cranes, Konecranes and Demag Material Handling, acquired by Terex in 2011. The legacy overhead crane business of P&H is owned by Konecranes, through its 2006 acquisition of Morris Material Handling, while the P&H mobile crane business is an early Terex legacy brand. One of these might just cause approval issues.
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Adecco SA slumped 4.3% to 78.75 Swiss francs after the Switzerland-based outsource services provider said revenues in the first-half ending in June soared 11% to?10.67 billion from?9.64 billion in a year ago period.
