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Terex Selling Material Handling Business to Konecranes
May 18, 2016
1 Min Read
Terex Corporation announced an agreement Monday to terminate its business combination agreement (BCA) with Finnish company Konecranes. As part of the deal, Terex will sell its material handling and port solutions (MHPS) business for $820 million and 19.6 million shares of Konecranes’ stock.
Both parties will not incur a fee for terminating its BCA, a Terex press release said, and at the conclusion of the transaction the Westport, CT-based company will own a quarter of the outstanding shares of Konecranes’ stock. The transaction is expected to be completed in January 2017.
“The sale of the MHPS business to Konecranes is good for our customers, team members, and shareholders,” John L. Garrison, president and chief executive officer of Terex said in the release. “The 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.”
With this move, Terex said it will be able to continue discussions with Zoomlion Heavy Industries Science & Technology Co. Ltd. If Terex and Zoomlion agree to the sale of Terex as a whole, Terex can terminate its agreement with Konecranes for a fee of $73 million.
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