Zoomlion Announces Plan for Financing Proposed Acquisition of Terex | Construction News

Zoomlion Heavy Industry Science and Technology Co. Ltd. (Zoomlion) has announced that it is continuing to pursue its proposed transaction to acquire Terex Corporation (Terex) for US$30.00 per share in cash.

Zoomlion made a non-binding offer on Dec. 4, 2015, representing a 41% premium over the last closing price of Terex stock before the offer (US$21.22).

Zoomlion has now prepared a concrete financing plan for the proposed acquisition. Zoomlion plans to use its own cash on hand to finance 40% of the transaction and bank debt to finance the other 60%. It has received letters of support from relevant banks.

Meanwhile, Zoomlion acknowledges that the proposed transaction will be subject to review by multiple regulatory authorities, but is confident it will receive the necessary regulatory approvals.

Zoomlion believes the proposed transaction offers strategic benefits to both companies.

Terex’s main products are aerial work platforms, cranes, and material handling equipment, whereas Zoomlion's main products include construction machinery, environmental equipment, and agricultural machinery.

After completion of the proposed transaction, Zoomlion and its
subsidiaries, including Terex, would feature a more comprehensive
product chain and wider product coverage, according to a news release from Zoomlion.

The Zoomlion release goes on to say that Terex’s market is mainly concentrated in the United States of America and European markets, whereas Zoomlion's presence is mainly in China and emerging markets. After the completion of the proposed transaction, the merged company
would be able to achieve a global footprint.

Zoomlion also believes that Terex possesses advanced manufacturing knowhow and technology, whereas Zoomlion has abundant production capacity and manufacturing cost advantages, so the merged company would realize production capacity synergies and optimize finance costs.

Zoomlion's statement further says that it believes it and Terex share similar corporate cultures, and that both companies have excellent management teams, so Zoomlion would look to Terex’s international management team to bring significant global experience and knowledge to the merged company.

"Therefore, the Company [Zoomlion] is confident that the merged company will be an even stronger global enterprise, which will continue to promote innovation and business growth, and create value for its customers, shareholders, employees as well as all stakeholders," said the statement.

Zoomlion says it has made all necessary preparation for the proposed transaction, and has engaged professional financial advisors and legal counsels to ensure the smooth progress of the proposed transaction.

Finally, the Zoomlion statement says the company emphasizes that no binding agreement has been entered into as of the date of the announcement.