Terex Said to Rebuff Takeover Approach From China's Zoomlion

  • Rival to Konecranes deal offered $30 a share for cranemaker
  • Konecranes and Terex agreed to an all-stock merger in August

Terex Corp., the U.S. crane and construction-machinery maker that agreed to combine with Finnish competitor Konecranes Oyj, received an unsolicited takeover bid from China’s Zoomlion Heavy Industry Science & Technology Co.

Zoomlion made an all-cash offer of $30 a share for Terex, according to a statement Tuesday from the Westport, Connecticut-based company. That values Terex at about $3.3 billion, data compiled by Bloomberg show. Terex has entered into a confidentiality agreement with Zoomlion and is in discussions regarding the proposal, according to the statement.

Terex rebuffed an initial proposal from Zoomlion and is focused on completing the merger with Konecranes, people familiar with the situation said earlier Tuesday, asking not to be identified as the situation is private. While Zoomlion hasn’t abandoned its interest in Terex, it’s unclear if the Chinese company will improve its offer, the people said.

Terex surged 37 percent to close at $20.50 in New York on Tuesday, after climbing as much as 60 percent in intraday trading. Konecranes fell 8.4 percent in Helsinki at 2:45 p.m.

Zoomlion Promotes

Zoomlion confirmed it has submitted a non-binding offer and said talks are ongoing and it will “actively promote” the deal with Terex, according to a separate statement on Wednesday. The Chinese firm has secured funding support from banks and has informed the government about the possible transaction, it said. Zoomlion shares, which fell 8 percent on Tuesday and then were suspended, are scheduled to resume Shenzhen trading on Thursday.

Konecranes plans to continue to pursue the merger with Terex and believes the offer “represents a highly compelling opportunity for both companies and their shareholders,” the company said in a statement Tuesday.

Konecranes and Terex agreed to an all-stock merger in August, to create a crane and materials-handling supplier with a combined $10 billion in sales. The enlarged group will be located in Finland and called Konecranes Terex Plc, according to a statement at the time. Terex’s board of directors hasn’t changed its recommendation of the proposed combination with Konecranes, according to Tuesday’s statement.

Under the existing all-stock merger agreement, Terex investors will receive 0.8 of a Konecranes share for each of their shares. That valued Terex at about $30.19 a share based on the last closing price before the deal was announced in August. Since then, Konecranes has fallen about 26 percent, meaning the same deal now values Terex at about 16.63 euros ($18.05) a share, based on data compiled by Bloomberg.

Zoomlion is China’s second-biggest maker of construction equipment by revenue, trailing Sany Heavy Industry Co., data compiled by Bloomberg show. The $4.4 billion company is based in the central Chinese city of Changsha, where late revolutionary leader Mao Zedong attended school.

Crane Operations

One concern about the Chinese offer is that a Zoomlion takeover could potentially face U.S. opposition because of the strategic importance of crane operations on ports, one of the people with knowledge of the matter said. Dutch firm Royal Philips NV last week canceled a planned $2.8 billion sale of its lighting-components unit to a consortium led by China’s GO Scale Capital because of resistance from the U.S. regulator charged with vetting foreign acquisitions to protect national security, known as the Committee on Foreign Investment in the U.S. or CFIUS.

Terex’s Port Solutions unit supplies equipment to Ports America Inc.’s Port Newark Container Terminal in New Jersey, and floating cranes to a subsidiary of Archer-Daniels-Midland Co. in the greater New Orleans area.

The company’s government and military business holds contracts with the U.S. Defense Logistics Agency and the U.S. General Services Administration, according to its website.

China Spree

China’s domestically-listed firms are in the midst of their biggest-ever overseas shopping spree, with outbound deals already totaling about $13.8 billion so far this year, according to data compiled by Bloomberg. Haier Group Corp. said on Jan. 15 it will use its publicly traded arm in Shanghai to acquire General Electric Co.’s home-appliance business for $5.4 billion.

Zoomlion has announced $793 million of acquisitions in the past five years, the Bloomberg-compiled data show. The Chinese company and Mandarin Capital Partners said in June last year they will jointly acquire 75 percent of Ladurner Ambiente SpA, an Italian operator of renewable-energy projects, for 66.2 million euros ($71.7 million). Zoomlion agreed in 2013 to buy M-tec Mathis Technik GmbH, a German maker of of dry-mortar mixers and pumps.

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