Konecranes has confirmed that there will be job losses as a result of its merger with Terex’s material handling and port solutions (MHPS) segment.
In a statement to shareholders, ahead of an emergency general meeting on September 15, the company said: “It is anticipated that there will be some overlap across certain functions within the organisation. While some reductions in personnel are likely in the short term, they will have to be assessed in the integration planning. The ultimate goal of this transaction is to generate growth and, along with it, new job opportunities.”
The company also outlined why it expects €140m (US$158m) of cost synergies per year within three years from the closing of the acquisition. “Synergies will come from procurement, including supply chain optimisation, insourcing/outsourcing and freight and logistics efficiency,” the company’s statement said.
“Another significant contribution to synergies will be made from operations, including manufacturing footprint and capacity utilisation,” the company continued, “a third source of synergies will be selling, general and administrative expenses (SG&A), including broader SG&A efficiencies, IT system consolidation and engineering and research and development optimisation.”
The company claimed that its sell-off of Stahl Crane Systems, which is necessary to get European regulator approval, will not affect its synergies. Konecranes will use the money raised from this sale to pay off some of the debts incurred by its acquisition of Terex MHPS. Konecranes also said that, as Stahl is a stand-alone business, it is relatively straightforward to carve out and will not affect the industrial logic behind the acquisition of Terex MHPS.
For the deal to go ahead, Konecranes needs the approval of two-thirds of shareholders’ votes cast and two-thirds of Konecranes shares represented by those voters.
If everything goes to plan, the deal will be closed in early 2017.