Terex Industrial Holding AG, the German subsidiary of Terex Corp. has decided to make a voluntary cash public tender offer for the outstanding share capital of Demag Cranes AG.
Demag’s business is highly complementary to the existing Terex business, the company said, and the combination has compelling industrial logic. The combined entity would have had total revenues of about $5.8 billion in 2010 with a strong footprint in Europe and emerging markets, especially in China.
“Demag is a leader in industrial cranes and port technology, and our companies are highly complementary. By combining our businesses, we would add a new product category of industrial cranes and hoists, and create the leading worldwide player in port equipment,” said Ronald M. DeFeo, Terex Chairman and Chief Executive Officer. “Demag products are competitive and innovative. The company is professionally managed, with highly motivated staff, and Terex will draw on this for both Demag’s ongoing success - and the future of Terex as a whole. Terex intends to build on the strong brand and service franchise of Demag in Germany and abroad. This transaction is predicated upon growth and not cost reduction,” Mr. DeFeo continued.
Terex will be financing the total offer consideration of approximately $1.3 billion from its existing cash and an already committed debt financing. The tender offer will carry a minimum acceptance level condition of not less than 51 percent of all Demag shares outstanding.