Chinese heavy-equipment manufacturer Zoomlion has made a US$3.3bn for US-based Terex, giving rise to uncertainty over the latter’s potential merger with Finnish company Konecranes.
Zoomlion has offered to acquire all of Terex’s outstanding shares for U$30 each, representing an almost 100% premium to the stock’s closing price prior to the announcement.
In a statement, Terex, which owns port equipment manufacturer Terex Port Solutions (TPS), noted: “The Terex board of directors has not changed its recommendation of the proposed combination with Konecranes.”
The board, however, is “reviewing the Zoomlion proposal to determine the course of action that it believes is in the best interests of Terex shareholders.”
“Terex has entered into a confidentiality agreement with Zoomlion and is in discussions with Zoomlion regarding the proposal,” it added.
Zoomlion’s proposal is conditioned on, among other things, receipt of US and Chinese regulatory approval and Zoomlion shareholder approval.
Finnish port equipment manufacturer Konecranes also released a statement, saying: “The board of directors of Konecranes has confirmed that Konecranes will continue to pursue the merger of equals with Terex (“Merger”) as planned”.
When the merger was announced in August 2015, the transaction was a so-called “tax inversion” allowing Terex to pay a lower rate of corporate tax by redomiciling to Finland, the headquarters of Konecranes.
Shares in Terex rose 36% to US$20.48 on January 26, 2015, after Zoomlion’s bid was made public.
Both Konecranes and Terex shares had fallen by greater than 40% since August’s merger announcement due to fears over an economic slowdown impacting demand for industrial equipment.