China's Zoomlion sweetens offer for U.S. crane maker Terex: sources

Tue Mar 15, 2016 2:11pm EDT
 
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By Greg Roumeliotis

(Reuters) - China's Zoomlion Heavy Industry Science & Technology Co Ltd 000157.SZ has raised its bid for U.S. crane maker Terex Corp (TEX.N: Quote), according to people familiar with the matter, as it challenges Terex's merger with Finland's Konecranes KCR1V.HE.

Zoomlion's latest move shows corporate China's determination to acquire U.S. assets and expand its global footprint. Another Chinese company, Anbang Insurance Group Co, is trying to disrupt hotel operator Marriott International Inc's (MAR.O: Quote) merger with peer Starwood Hotels HOT.N.

Zoomlion's main stumbling block in its negotiations with Terex is the price, rather than concerns that the United States could block the deal because of Terex's ties to the U.S. military and presence in U.S. ports, the people familiar with the matter said this week.

Zoomlion has increased its offer to more than $3.4 billion by adding a special dividend for Terex shareholders of $1 per share to its previous $30 per share cash offer, the people said. Terex has responded by asking for $32.75 per share in cash to terminate its merger agreement with Konecranes and agree to sell itself to Zoomlion, the sources said.

The sources asked not to be identified because the negotiations are confidential.

Terex shares jumped as much as 12 percent on the news and were trading up 7.3 percent at $23.38 in New York on Tuesday.

Terex has argued privately that the synergies with Konecranes in the material handling and port systems businesses of the two companies mean Terex is worth more in the long term than what Zoomlion has offered, Reuters reported last month.

In response to this, Zoomlion has also discussed offering Terex shareholders some type of security that would allow them to benefit from any upside in the potential deal, as opposed to completely cashing out, the sources said.   Continued...

 
A Zoomlion company logo is seen on an advertisement as passengers walk past at an airport in Changsha, Hunan province July 13, 2013. REUTERS/Stringer