The European Commission has cleared the acquisition of Terex’s crane and container handling business by Finland’s Konecranes conditional on the divestment of Konecrane’s Stahl subsidiary, which supplies industrial cranes, crane components and spare parts.
Konecranes is a global supplier of lifting equipment. Terex’s Material Handling & Port Solutions segment, supplies industrial cranes, crane components, crane services and container handling equipment. The proposed acquisition would create the world’s leading provider of hoists, industrial cranes and handling solutions.
The Commission’s preliminary investigation found that the original transaction would create significant overlaps between Konecranes’ and Terex’s activities in the supply of electric chain hoists and wire rope hoists, as well as standard cranes and container handling equipment. The investigation also determined that the transaction would risk significantly reducing effective competition in the markets for electric chain hoists and wire rope hoists in the European Economic Area, particularly in Germany and France. Customers raised concerns about the risk of price increases for both electric chain hoists and wire rope hoists in the EEA, particularly Germany and France.
To address the Commission’s competition concerns, Konecranes offered to divest its Stahl global business for hoists, cranes and other handling materials.
Konecranes said it will begin the divestiture process immediately as Konecranes and Terex are not allowed to close the acquisition until the Commission has approved the buyer of the Stahl CraneSystems business. Stahl totaled €145 million (about U.S. $161 million) in 2015 sales and has about 700 employees.
“The divestment of Stahl Cranesystems will not affect the industrial logic behind the MHPS acquisition,” said Panu Routila, CEO of Konecranes. “The targeted operational synergies of €140 million within three years from closing of the MHPS acquisition remain materially intact."
Terex Corp. also announced that the proposed transactions received early termination of the premerger waiting period by the U.S. Department of Justice.
“The clearances granted by both the European Commission and U.S. anti-trust regulators are an important step towards the completion of the planned divestiture of our MHPS segment,” said John Garrison, Terex CEO. “This also advances our effort to focus our organization on three business segments and simplify our operating structure.”