09.12.2013

Terex sells truck business

Terex is to sell its off-highway rigid and articulated truck business to Volvo Construction Equipment for $160 million in cash.

The deal includes the company’s manufacturing facility in Motherwell, Scotland and will be subject to regulatory approvals, but us expected to complete in the first half of 2014.

Terex chief executive Ron Defeo said: “The truck business has been an important part of our company for more than three decades and continues to produce world class products with dedicated and talented employees. However, trucks no longer fit within our changing portfolio of lifting and material handling businesses. I am confident that it will benefit by joining a company sharing similar competencies and offering complementary products and services.”
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A Terex articulated truck/hauler

“The sale of the Truck business reflects our strategy to manage our portfolio of businesses and focus on those businesses that provide the greatest returns for our shareholders. We recently announced the initiation of quarterly cash dividends to our shareholders and a share repurchase program and the proceeds from this sale aid our efforts to improve our financial efficiency and implement these programmes.”

Volvo CE president, Pat Olney added: “This is a strategic acquisition that offers Volvo CE considerable scope for growth. The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications at a time of renewed confidence in the sector. The addition of the Terex articulated hauler range will enhance our position in this segment, particularly in high-growth markets. We believe that the Motherwell facility and its global team members, as well as the current distribution partners, are valuable to the success of the business in the future.”

Vertikal Comment

This move further focuses Terex on cranes, aerial lifts and telehandlers as it continues to move away from mining and earthmoving where it will always play second fiddle to companies like Caterpillar and Komatsu. The sale of the articulated truck business is significant in that it was the first businesses with the Terex name, created when General Motors sold its Euclid business 1970 and retained the Motherwell operation. After a brief spell under IBH GM sold it to Northwest in 1987 which adopted Terex as its corporate name. Cranes and aerial lifts were added in 2002 with the acquisition of Demag mobile cranes and Genie aerials.

The company is increasingly polarising towards a three division business with Cranes of all types, aerial lifts and road related construction – crushing, screening, grading, paving and concrete. It would not be a surprise if some of the smaller construction equipment operations were sold as the market begins to pick up.