Konecranes Scraps Planned Merger With Terex

Finland's Konecranes Oyj said Monday it will buy a key unit of U.S. peer Terex Corp. for €1.13 billion ($1.28 billion) in cash and shares, ending the companies' plans for a full merger that had been complicated by a rival bid and regulatory hurdles since it was first announced in August last year.

Konecranes said it would buy Terex's material handling and port solutions unit, which supplies industrial cranes, crane components and services for use in manufacturing and at port and rail facilities.

Terex will receive $820 million in cash and 19.6 million newly issued Konecranes class B shares, making Terex a 25% shareholder, Konecranes said.

Shortly after the plans for a full merger between Konecranes and Terex were announced last year, China's Zoomlion Heavy Industry Science & Technology Co. launched a rival bid for Terex. Also, last month Konecranes warned that new U.S. regulations to curb so-called tax inversions would wipe out a chunk of the projected benefits from a merger.

Terex has the option of backing out of the latest deal with Konecranes before May 31 if it enters into a merger deal with Zoomlion instead, but it would be liable to pay Konecranes a $37 million termination fee.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

May 16, 2016 03:35 ET (07:35 GMT)

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