Equipment Type

Terex Stops Konecranes Merger Work to Consider Zoomlion Offer

Company has not quit the Konecranes merger but has halted information sharing and work on integration until further clarity can be had.

February 23, 2016

Reuters reports Terex Corporation halted all work on its integration with Finland's Konecranes Abp last Friday.

While Terex has made no decision on whether it will abandon its agreed merger with Konecranes, the move is the clearest indication yet that it views a sale to Zoomlion as a realistic alternative despite concerns such a deal could be blocked by the United States on national security concerns most recently brought to Congress's attention by California Representative Duncan Hunter.

"People may think, 'Oh Terex builds cranes, it does not really impact our national security,'" said Stephen Cheney, a retired Marine Corps general who is chief executive of the American Security Project, a public policy and research organization, says "People may think, 'Oh Terex builds cranes, it does not really impact our national security,' but it really does. The company has huge defense industry ties, and if you are positioned in U.S. bases and stations and you watch the movements of troops and what is going on in those bases, you are really allowing them access to classified information they should not have and could exploit. It is very problematic in my view."

Financial and antitrust filings regarding Terex's merger with Konecranes that are in the works will continue unaffected, Terex added, emphasizing that it had not so far changed its recommendation on the merger with Konecranes.

"Given the uncertainties involved with the merger and proposed acquisition by Zoomlion, the decision was made to halt information sharing, work on integration, and synergies between the businesses, until further clarity can be had on the course of action," Terex said in a statement after Reuters reported on the cessation of integration work, citing sources.

A formal Committee on Foreign Investment in the United States (CFIUS) review of Zoomlion's acquisition of Terex would likely take up to 75 days, according to people familiar with the matter. Terex has not informed Zoomlion how long it will take to make a decision on its latest proposal, the people added.

Source: Reuters

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