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Post-tax savings accompany Terex ‘inversion’ in Konecranes merger

Sources: Terex Corp., Westport, Conn.; CP staff

Eyeing global scale and near-term earning synergies upward of $120 million, Terex Corp. and Konecranes Plc of Helsinki plan an all-stock “merger of equals,” creating a company whose 2014 revenues totaled about $10 billion. Terex and Konecranes shareholders will own approximately 60 percent and 40 percent, respectively, of the combined business, to operate as Konecranes Terex Plc, based in Finland with major corporate functions continuing in Connecticut.

The combination will bring together two complementary leaders in cranes, materials handling, and equipment servicing solutions, with 37 percent of business logged in the Americas and a near-equal share in Europe, the balance derived from the rest of the world. Construction will represent a projected 8 percent of the overall Konecranes Terex business, against 11 percent under Terex.

Officials anticipate Konecranes Terex to build shareholder value through: increased global scale with enhanced competitiveness to rival low-cost emerging market players; broader presence in key sectors with greater opportunity to capitalize on growth trends in the port and industrial sectors, plus services; more robust portfolio of complementary products and customer solutions; critical scale for further technology development; significant operational and corporate synergies, plus complimentary geographic profiles; and, strong balance sheet and cash flow generation.

“This merger brings together two great businesses and through synergies provides another lever that is within our control to deliver value-creation to shareholders,” says Terex CEO Ron DeFeo, who will maintain his title with Konecranes Terex. “We have a deep respect for Konecranes and look forward to joining forces with them to build a stronger and more diverse company that will be in an excellent position to succeed in a dynamic and highly competitive global industry.”

"With a focus on Lifting and Material Handling solutions, Konecranes Terex will be in an excellent position to deliver enhanced growth in revenue and margins through several strategic advantages, including significant cross-selling opportunities,” adds Konecranes Chairman Stig Gustavson, who will maintain his title over the new business. “There is a common culture between the two organizations, with both companies having long histories of designing competitive and innovative solutions. Together, we will have the opportunity to expand what Konecranes and Terex have built and become even stronger in the future."

Upon close of the transaction, the combined company will appoint a nine-member board comprised of five Terex and four Konecranes directors. Konecranes Terex is expected to have approximately 32,000 employees worldwide, and will trade on the New York Stock Exchange and Nasdaq Helsinki.