Under the agreement, Terex shareholders will receive 0.80 Konecranes shares for each existing Terex share (“Exchange Ratio”). Equivalent terms will apply to instruments granted under Terex’ long-term incentive plans. Upon closing of the transaction, based on current fully diluted shares outstanding, Terex shareholders will own approximately 60% and Konecranes shareholders will own approximately 40% of the combined company.
Some of the headlines:
– Combination of highly complementary businesses creates a leading global Lifting and Material Handling Solutions company with a well-balanced business and geographic profile
– With €7.5/$10.0 billion in combined 2014 revenues, the combined company, to be called Konecranes Terex Plc, will have critical scale to deliver outstanding technology innovation and enhanced service to customers
– Terex shareholders will receive 0.80 Konecranes shares for each existing Terex share, which is consistent with the average share-price implied exchange ratios over the past 3 and 6 months of 0.7921 and 0.7933, respectively
– At closing, expected during the first half of 2016, the combined company will be owned approximately 60% by Terex’ shareholders, and 40% by Konecranes’ shareholders; the transaction is expected to be accretive to the shareholders of both companies in first full year after closing
– Identified annual operational synergies of at least €110/$121 million EBIT contribution and additional €32/$35 million post-tax income benefit from financing, cash management and structure optimization, anticipated to be fully implemented within 3 years from closing
– Joint intention of Konecranes and Terex to execute a share buy-back program post closing of up to €1.4/$1.5 billion, split between ca. €456/$500 million as soon as possible after closing and up to an additional €0.9/$1.0 billion executed within 24 months after closing
– Enhanced capital structure and strong free cash flow expected to support growth with increased returns to shareholders, including maintenance of Konecranes dividend level
– Konecranes Terex to be incorporated in Finland, with headquarters in Hyvinkää, Finland and Westport, Connecticut, USA
– Konecranes’ current Chairman of the Board will become Konecranes Terex’ Chairman and the Terex CEO will become Konecranes Terex’ CEO. The nine-member Board will include five Directors to be nominated by Terex and four Directors to be nominated by Konecranes