Terex Asks Zoomlion to Up Its Offer, Reuters Reports
Terex Corp. has asked Chinese manufacturer Zoomlion to sweeten its $3.3 billion offer if it wants Terex to walk away from its merger agreement with Finland’s Konecranes, according to a Reuters report. Although Terex had temporarily put a hold on integration plans it had begun with Konecranes while it continued to talk with Zoomlion and consider its offer, the news, citing unnamed sources, suggests the offer needs to be higher for Terex to abandon the agreement it had already made with the Finnish crane manufacturer.
The Reuters report said that Terex has argued privately that the synergies with Konecranes in the material handling and ports systems businesses of the two companies are of greater long-term value than the $30 per share cash offer Zoomlion offered, the sources said this week. While Terex has not said exactly what its price would be to justify breaking up the Konecranes merger, Zoomlion has not publicly shown willingness to increase its offer.
Konecranes has offered 0.8 of its shares for each Terex share, and has argued that a merger of the two companies would strengthen their ability to deal with a cyclical downturn in their industries, preparing shareholders for strong benefits in an upturn.
Neither Zoomlion nor Terex have expressed concerns about a possible Committee on Foreign Investment in the United States opposition to a Zoomlion-Terex merger. Last week U.S. Representative Duncan Hunter, a member of the House Committee on Armed Services raised concerns because of Zoomlion’s longtime association with China’s People's Liberation Army. Potential CFIUS scrunity of a deal have been mentioned because of Terex’s 97 contracts with the U.S. government and port-related contracts. However, the value of Terex’s priority-rated government contracts is said to be small and not material to Terex’s business.
Also this week Konecranes said it still expects its merger with Terex to go through despite the Zoomlion offer, although it might take longer than previously planned.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.