Equipment manufacturer Terex Corp. announced May 16 that it is ending its plan to merge with Konecranes, and will instead sell its material-handling and port solutions [MHPS] unit to the Finnish-based company for $1.3 billion. Terex had signed a merger agreement with Konecranes in August, 2015, but it received an unsolicited takeover bid from Chinese-based Zoomlion in February. Konecranes will acquire Terex's MHPS business unit for $820 million in cash and 19.6 million newly issued Konecranes shares.
Terex reserves the right to terminate the deal with Konecranes up to May 31, and says it may do so if it receives a fully financed acquisition offer from Zoomlion by that time. In that case, Terex would pay Konecranes a termination fee of $37 million. According to Terex, Zoomlion is aware of these terms, and Terex is now awaiting their next move. “We are continuing our discussions with Zoomlion regarding a possible acquisition of Terex, with or without the MHPS,” says John Garrison, president and CEO of Terex, in a May 16 call with analysts. “Our objective remains to obtain a fully financed and binding agreement.”