Konecranes-Terex deal to proceed as China's Zoomlion drops rival bid
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 bid for U.S. crane maker Terex Corp TEX.N, clearing the way for a smaller deal between Terex and Finland's Konecranes KCR1V.HE.
The decision comes after six months of merger talks between Terex and Zoomlion and marks the latest setback to corporate China's ambitions to acquire U.S. assets. In March, Anbang Insurance Group Co unexpectedly withdrew its $14 billion offer to buy Starwood Hotels & Resorts Worldwide Inc HOT.N.
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 in August. But Zoomlion emerged publicly 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 (MHPS) - for 1.1 billion euros ($1.2 billion).
"Unfortunately, after many months of discussions, Zoomlion was unable to provide a fully financed, binding proposal for the purchase of Terex with or without MHPS," David Sachs, chairman of the board of Terex, said in a statement.
The latest agreement with Konecranes 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.
"Following negotiations, Zoomlion has concluded that Terex's expectations on the valuation do not adequately reflect the impact of the sale of the MHPS segment," Zoomlion said in a statement that elaborated on its move. Continued...