🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Konecranes-Terex deal to proceed as China's Zoomlion drops rival bid

Published 27/05/2016, 09:51
© Reuters. A Zoomlion company logo is seen next to its excavators at an exhibition in Shanghai
PHG
-
KCRA
-
TEX
-
HOT
-
MAR
-
1157
-

By Anne Marie Roantree and Tuomas Forsell

HONG KONG/HELSINKI (Reuters) - China's Zoomlion Heavy Industry Science and Technology Co Ltd <000157.SZ> has abandoned its $3.4 billion (2.32 billion pounds) bid for U.S. crane maker Terex Corp (N:TEX) after failing to agree terms, clearing the way for a smaller deal between Terex and Finland's Konecranes (HE:KCR1V).

The decision comes after months of merger talks between the three companies and marks the latest setback to corporate China's ambitions to acquire U.S. assets.

Zoomlion and Konecranes had both bid for Terex to help them better cope with cooling Chinese and weak European demand in the cranes business.

Konecranes and Terex had agreed on an all-share merger last August, but Zoomlion emerged as a rival bidder in January and sweetened its unsolicited offer to $3.4 billion in March.

The Finnish company this month scrapped plans for a full merger and instead agreed to buy just part of Terex -- its cranes business for ports and factories -- for 1.1 billion euros ($1.2 billion).

The agreement gave Terex the right to terminate the deal for a fee by the end of the month if its talks with Zoomlion were to proceed.

"No agreement can be reached on the crucial terms," Zoomlion said in a statement on Friday, but declined to specify what the hurdles were.

Konecranes shares rose 4.9 percent in Helsinki while Zoomlion's Hong Kong-listed shares (HK:1157) fell 3.2 percent by 0800 GMT.

"We've reached the result we wanted, and we are very pleased," Konecranes Chief Executive Panu Routila told Reuters, adding that the companies would start integration plans after the summer.

Last week, Konecranes shares jumped as much as 18 percent when the modified deal was announced. The merger is expected to close early next year.

A successful acquisition would have put Zoomlion on a more equal footing with cross-town rival Sany Heavy Industry Co Ltd <600031.SS> which has a U.S. assembly plant.

"Without the positive effect due from Terex, Zoomlion will continue to develop slowly at its own pace," said Jiao Yiding, an analyst at China Merchants Securities in Shenzhen.

Last month, Zoomlion posted a record quarterly loss as Chinese heavy equipment makers battle an historic glut of unsold equipment.

The collapse in talks comes after China's Anbang Insurance Group Co said in April it had abandoned its $14 billion bid for Starwood Hotels & Resorts Worldwide Inc (N:HOT), paving the way for Marriott International Inc (O:MAR) to buy the Sheraton and Westin hotels operator.

© Reuters. A Zoomlion company logo is seen next to its excavators at an exhibition in Shanghai

In January, the United States blocked a bid by Chinese-based investment fund GO Scale Capital for Philips' (AS:PHG) lighting-components business on security grounds.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.