Volvo Construction Equipment has agreed to acquire hauler equipment manufacturer Terex Equipment Ltd., for a purchase consideration of approximately $160 million (SEK 1 billion) on a cash and debt-free basis. The deal, which is subject to regulatory approval, includes Terex’s main production facility in Motherwell, Scotland and two product ranges that include rigid and articulated haulers.
Additionally, the deal includes distribution of haulers in the U.S., as well as a 25.2 percent holding in Inner Mongolia North Hauler Joint Stock Co., which maufactures and sells rigid haulers under the Terex brand in China.
"This is a strategic acquisition that offers Volvo CE considerable scope for growth,” said Volvo CE President Pat Olney. “The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications."
The acquisition includes five models of rigid haulers, with payloads ranging from 32 to 91 tons. The introduction of rigid haulers will extend Volvo CE's position in the light mining segment. The deal also sees a further three models of articulated haulers added to the Volvo portfolio, with payloads ranging from 25 to 38 tons.
If approved, the acquisition adds some 500 employees to Volvo CE's existing workforce. It also allows for the continued use of the Terex brand name on the relevant machines for a transitional period.
The transaction is expected to be finalized during the second quarter of 2014. For implementation, approval is required from relevant authorities.
“The truck business has been an important part of our company for more than three decades and continues to produce world class products with dedicated and talented employees,” said Ron DeFeo, Terex chairman and CEO. “However, trucks no longer fit within our changing portfolio of lifting and material handling businesses. I am confident that the truck business will benefit by joining a company sharing similar competencies and offering complementary products and services. We are pleased to have entered into this agreement with Volvo, which represents a strong strategic buyer for the business who values our distribution network and team members.”