Finland’s Konecranes and US heavy equipment maker Terex have announced they will merge by the first half of 2016. Described as “an all-stock merger of equals” the new company, Konecranes Terex (KT), will have a significant role to play in the port handling equipment solutions sector.
The new company should have combined revenues of EUR7.5 billion (USD10 billion), though KC’s contribution is just EUR2 billion and EBITDA of EUR162 million out of the putative group total of EUR636 million.
Terms of the deal are that each Terex share is equivalent to 0.8 of a Konecranes share, eventually resulting in former Terex shareholders having 60% of the company, with Konecrane’s will own the remainder.
KT will be incorporated in Finland but there will be two head offices in Hyvinkää and Westport, Connecticut, with the board consisting of five Terex nominees and four named by Konecranes, which will occupy the chair. KT will be listed on both the NYSE and on Nasdaq.
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According to the companies’ joint statement, synergies of EUR110 million (USD121 million) will be achieved annually with an EBIT contribution of EUR32 million annually, but Konecranes chairman Stig Gustavson admitted that these will be matched in the first year by implementation charges. Konecranes has nearly 12,000 employees worldwide while Terex employs over 20,000.
Gustavson told a press conference in Helsinki that the “critical scale is needed to maintain competitiveness” and that the “merger will enable us to deliver extraordinary solutions” plus “significant value to shareholders”.
Terex CEO Ron DeFeo, who will head the combined company, said the merger “brings together two great businesses and through synergies provides another lever that is within our control to deliver value-creation to both the shareholders of Terex and Konecranes”. He said Terex had “a deep respect” for Konecranes and was looking 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”.
When finalised, KT will embark on a share buyback worth up to EUR1.4 billion within three years. Konecranes’ shares shot up 22% on the news on Helsinki Stock Exchange; the NYSE was closed when the merger announcement was made.
This post was sourced from IHS Maritime 360: View the original article here.