Konecranes/Terex to merge to form global lifting and material handling solutions company
Finnish company Konecranes Terex Corporation have unanimously approved a definitive agreement to combine their businesses in a merger of equals.
The combined company, to be called Konecranes Terex, will be a leading global lifting and material handling solutions company with estimated combined 2014 revenues and EBITDA of €7.5 billion/US$10 billion and €636 million/$845 million respectively.
Under the agreement, Terex shareholders will receive 0.80 Konecranes shares for each existing Terex share with Terex shareholders owning approximately 60% and Konecranes shareholders owning approximately 40% of the combined company.
The combined company is planned to be listed on Nasdaq Helsinki and New York Stock Exchange.
The combination will bring together complementary companies in lifting, materials handling, and equipment servicing solutions.
Konecranes Terex will be parent to a family of leading brands with global positions in the industrial lifting, port solutions, aerial work platforms, materials processing and cranes categories.
Stig Gustavson, chairman of the board of Konecranes, said: “The combination of Konecranes and Terex is a defining step in the history of both companies. With a focus on Lifting and Material Handling solutions, Konecranes Terex will be in an excellent position to deliver enhanced growth in revenues and margins through several strategic advantages, including significant cross-selling opportunities.
“There is a common culture between the two organizations, with both companies having long histories of designing competitive and innovative solutions. Together, we will have the opportunity to expand what Konecranes and Terex have built and become even stronger in the future.”
Terex CEO, Ron DeFeo, added: “This merger brings together two great businesses and through synergies provides another lever that is within our control to deliver value-creation to both the shareholders of Terex and Konecranes. We have a deep respect for Konecranes and look forward to joining forces with them to build a stronger and more diverse company that will be in an excellent position to succeed in a dynamic and highly competitive global industry.”
Significant Synergies Create Strong Upside Potential for Shareholders
The combined company expects to achieve at least €110 million/$121 million of annual pre-tax cost synergies from procurement savings, optimisation of operations as well as selling, general and administrative efficiencies. In addition, Konecranes Terex anticipates to realise post-tax income enhancement from financing, cash management and structure optimisation of at least €32 million/$35 million annually. In total, these synergies are expected to result in €109 million/$119 million of annual net income benefits to be fully implemented within three years from closing, which is expected to occur during the first half of 2016.
The combined company will maintain headquarters in Hyvinkää, Finland as well as Westport, Connecticut, USA. Following closing of the transaction, the combined entity is expected to have approximately 32,000 employees worldwide.
The transaction is subject to approval by both Terex and Konecranes shareholders, regulatory approvals and other closing conditions.