Terex Stumbles Over Terminated Zoomlion Talks

By Chris Lange Updated Jan 13, 7:28AM EST · Published May 27, 11:40AM EDT

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Terex Stumbles Over Terminated Zoomlion Talks — © Thinkstock

Shares of Terex Corp. (NYSE: TEX) tumbled in Friday’s session following the announcement that its talks with Zoomlion were terminated. At the same time, the company also announced that the sale of its Material Handling and Port Solutions business (MHPS) to Konecranes will proceed.

The sale of MHPS to Konecranes for roughly $1.3 billion is subject to shareholder and regulatory approvals. The sale is expected to close in January 2017.

Management intends to use the net proceeds from the sale to significantly reduce Terex’s debt levels and improve its balance sheet, providing it with the ability to buy back shares and invest in remaining businesses.

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As a 25% shareholder of Konecranes, Terex will be able to share in the synergies and economic upside of the combined MHPS and Konecranes businesses.

David A. Sachs, Terex chairman, commented:

The Board of Directors and Management of Terex worked diligently to determine if an appropriate transaction with Zoomlion, beneficial to Terex shareholders, was achievable. 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. This ends the prolonged period of uncertainty that this process has brought to Terex and its customers, team members and shareholders. The Board is confident in our global management team and with Terex’s prospects for the future.

John L. Garrison, president and CEO of Terex, added:

The sale of the MHPS business to Konecranes will now proceed. This transaction represents excellent value realization for our shareholders and also provides certainty for our MHPS customers and team members. We expect this sale to be accretive to Terex’s earnings per share.

Shares of Terex traded down about 17% to $20.20 Friday morning, with a consensus analyst price target of $25.52 and a 52-week trading range of $13.62 to $27.11.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.