MHS Konecranes and Kito have entered into a definitive agreement concerning a business transfer through asset purchase. Based on this agreement, Kito will purchase the necessary assets related to the hoist business of MHS, and continue the hoist and related spare parts business currently operated by MHS.
The transfer of the assets is expected to be finalized on November 1, 2010. The transaction relates to the strategic alliance signed on March 23, 2010, between Konecranes and Kito.
As part of the strategic alliance, the two companies signed a Memorandum of Understanding according to which Konecranes intends to sell the hoist distribution business of its Japanese joint venture MHS Konecranes to Kito. As a preparation for this transaction, Konecranes, on June 4, 2010, finalized the agreement to increase its ownership in MHS Konecranes to 100 percent by acquiring the remaining 35 percent stake from Meidensha Corp.
After the sale of MHS's hoist distribution business to Kito, Konecranes will continue its end user customer business in Japan as a supplier of cranes and crane service to local customers.
The parties have agreed not to disclose the transaction price. The transaction is not expected to have any material impact on Konecranes' results.