26.01.2016

Zoomlion bids for Terex

Terex has confirmed this afternoon that it has received an unsolicited, non-binding acquisition proposal from Chinese crane, concrete pump and construction equipment manufacturer Zoomlion Heavy Industry Science and Technology.

The offer is to acquire all of the outstanding shares of Terex for $30 a share in cash and represents a 100 percent premium over Monday's closing price for Terex and values the company at around $3.25 billion.

Terex agreed a merger deal with Konecranes last August and the board of directors has not changed its recommendation to accept that deal which is progressing steadily. However it has signed a confidentiality agreement with Zoomlion and is planning to hold discussions regarding its proposal. click here to see Terex and Konecranes to merge

It says that “Consistent with our fiduciary duties, the Terex board of directors, in consultation with its legal and financial advisors, is carefully reviewing the Zoomlion proposal to determine the course of action that it believes is in the best interests of Terex shareholders. There will be no further comment until the board has completed its review”.

Vertikal Comment

While this is a surprise, it is not totally unexpected, rumours have been circulating for some time about a possible bid being made for Terex Cranes, with several Chinese manufacturers supposedly interested. A bid for the whole company prior to completion of its merger with Konecranes though was not widely anticipated.

Zoomlion has remained tight lipped over its intentions, but one has to assume that the company is particularly interested in the Crane business? Although the rest of the group also has interest.

If a deal was agreed it could face some serious hurdles in gaining regulatory approval in the USA and EU.

We expect it to be rejected, and given that the stock price remains well below the Zoomlion offer at around $21.45 - so do most shareholders. Watch this space