Terex Corporation has broken off negotiations with Zoomlion after disagreeing on crucial terms.
Reports say Zoomlion was unable to provide a fully financed, binding proposal for the purchase of Terex.
This new development clears the way for Terex to proceed with its earlier plans to sell Konecranes the Terex material handling and ports solution (MHPS) segment, a deal that Kepler Cheuvreux analyst Johan Eliason described at the time as the “dream solution.” The $1.2 billion deal will give Terex a 25 percent stake in Konecranes.
“The sale of the MHPS business to Konecranes will now proceed,” said John L. Garrison, Terex President and Chief Executive Officer. “This transaction represents excellent value realization for our shareholders and also provides certainty for our MHPS customers and team members. We expect this sale to be accretive to Terex’s earnings per share. The proceeds will significantly reduce Terex’s debt levels and improve our balance sheet, providing us with the ability to buy back shares and invest in our remaining businesses. As a 25% shareholder of Konecranes, Terex will be able to share in the synergies and economic upside of the combined MHPS and Konecranes businesses.”
"We've reached the result we wanted, and we are very pleased," Konecranes Chief Executive Panu Routila told Reuters, adding that the companies would start integration plans after the summer.
In a statement today, Konecranes said its deal to buy the $1.3 billion MHPS will go ahead as planned and the terms remain unchanged. It is expected to be final in January 2017.
Source: Terex; Bloomburg;