Terex Corporation and Konecranes Plc have mutually agreed to terminate the business combination agreement (“BCA”) they entered into on August 10, 2015, without payment of a fee by either party.
In connection with the termination of the BCA, Terex has signed a definitive agreement to sell its Material Handling and Port Solutions business (“MHPS”) to Konecranes for about $1.3 billion.
The consideration being paid is composed of $820 million in cash and $19.6 million of newly issued shares of Konecranes. Upon completion of the transaction, Terex will own approximately 25% of the outstanding shares of Konecranes and have the right to nominate two directors. The transaction, which is subject to customary regulatory approvals and the approval of the shareholders of Konecranes, is expected to close in January 2017.
The agreement provides Terex with the ability to continue to pursue discussions with Zoomlion Heavy Industries Science & Technology Co., Ltd. (“Zoomlion”). Terex has the right to terminate the agreement on or before May 31, 2016, for a fee of $37 million if Terex and Zoomlion agree on a sale of Terex as a whole.
“The sale of the MHPS business to Konecranes is good for our customers, team members and shareholders,” said John L. Garrison, Terex president and CEO. “This transaction is expected to be accretive to Terex earnings per share and preserves the strategic logic for the original merger of equals. In addition, it will significantly reduce Terex’s debt levels, improves our balance sheet, and gives us longer term financial flexibility to invest in our business and buy back shares. As a 25% shareholder of Konecranes, Terex will also be able to share in the dividends, synergies, and economic upside of the combined business.”
Mr. Garrison emphasized, “This new transaction structure offers other substantial benefits to Terex shareholders as well. Importantly, the transaction locks in the benefits of the MHPS sale while preserving the ability for Terex to continue discussions with Zoomlion on a potential sale of the company at $31 per share with the MHPS business or, alternatively, for the sale of Terex without the MHPS business.”
Conference Call
Terex Corporation will be hosting a conference call at 9:00 am Eastern on Monday, May 16, 2016 to provide an overview of the transaction and answer analysts’ questions.
Investors in North America can access the call by dialing 877-726-6603. Investors outside of North American can access the call by dialing 706-634-5517. No passcode will be required; referencing the Terex Konecranes call will be sufficient. The conference call also will be available live on the company’s website at www.Terex.com. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection.
Lift & Access is part of the Catalyst Communications Network publication family.
