{"id":2960,"date":"2016-05-16T14:13:46","date_gmt":"2016-05-16T14:13:46","guid":{"rendered":"http:\/\/minutes.machine.market\/?p=2960"},"modified":"2016-05-16T14:13:46","modified_gmt":"2016-05-16T14:13:46","slug":"why-everyone-is-sweet-on-crane-maker-terex","status":"publish","type":"post","link":"https:\/\/machine.market\/blog\/why-everyone-is-sweet-on-crane-maker-terex\/","title":{"rendered":"Why Everyone Is Sweet on Crane Maker Terex"},"content":{"rendered":"<h2 class=\"sub-head\">The courtship of the U.S. company may turn out to suit all parties, including Finland\u2019s Konecranes and China\u2019s Zoomlion<\/h2>\n<p>The <a href=\"http:\/\/www.wsj.com\/articles\/why-everyone-is-sweet-on-crane-maker-terex-1463401666\">WSJ<\/a> reports In the continuing date between America\u2019s <a href=\"http:\/\/www.terex.com\/port-solutions\/en\/\" target=\"_blank\" rel=\"noopener noreferrer\">Terex<\/a> and China\u2019s <a href=\"http:\/\/en.zoomlion.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Zoomlion<\/a>, the Finnish third wheel also gets to have some fun.<\/p>\n<p>Equipment maker Terex said Monday that it would sell a chunk of its operations to Finland\u2019s <a href=\"http:\/\/www.konecranes.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Konecranes<\/a>, in exchange for cash and newly issued Konecranes stock worth a total $1.3 billion at the time the deal was announced. This gives Terex a 25% stake in the Finnish company. And it terminates the all-share deal Terex had struck last year to sell the whole of itself to Konecranes\u2014an acquisition that grew complicated a few months later when Zoomlion Heavy Industry Science and Technology made a richer cash bid.<\/p>\n<p>Terex\u2019s sale of this segment, which supplies industrial cranes and equipment for ports, is a creative solution that can make all parties happy\u2014to varying degrees.<\/p>\n<p>Start with the Finns. Their original merger was suffering as Konecranes\u2019 shares plunged, and they faced the possibility of losing out completely to Zoomlion. Through this side deal, the Finns actually get the primary Terex asset that they wanted last year.<\/p>\n<p>Konecranes\u2019s shareholders, relieved that they will acquire some part of Terex, pushed up the stock 20% Monday. One disadvantage: Konecranes is forking out $820 million in cash. That raises questions about the current dividend\u2014the stock yields 4.3%\u2014as well as promised buybacks.<br \/>\nKonecranes is paying a higher multiple for this asset than it was offering for the whole of Terex last year. But that may be justifiable. The company pegs synergies that are 27% greater than it estimated last year when it was trying to buy the whole company. That\u2019s partly because what it learned about Terex as it planned to integrate their operations helped it identify more areas for cutting costs.<\/p>\n<p>Then there\u2019s Zoomlion. Its aggressive bid for Terex unnerved U.S. politicians who considered Terex\u2019s port-and-crane equipment sensitive. By taking some of these businesses out of the equation, Terex\u2019s side deal could make Zoomlion\u2019s approach more palatable.<\/p>\n<p>And the businesses that are left are likely the ones the Chinese company cares more about, anyway. They account for nearly 80% of Terex\u2019s sales and include truck-crane technology China sorely lacks. And if Zoomlion does end up buying Terex, it will inherit a 25% stake in Konecranes and get to passively enjoy further benefits from this deal.<\/p>\n<p>&nbsp;<\/p>\n<p>As for Terex, it looks like the clearest winner. Receiving cash from Konecranes halves its ratio of net debt to trailing earnings before interest, tax, depreciation and amortization to 1.4 times. That makes it a more attractive takeover target financially.<\/p>\n<p>And now that there\u2019s a lower chance Washington may stymie Zoomlion, Terex may flirt more seriously with its Chinese suitor. It doesn\u2019t have to feel guilty about cheating on Konecranes, either.<\/p>\n<p>By\u00a0<span class=\"name\">ABHEEK BHATTACHARYA<\/span><\/p>\n<p>Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The courtship of the U.S. company may turn out to suit all parties, including Finland\u2019s Konecranes and China\u2019s Zoomlion The WSJ reports In the continuing date between America\u2019s Terex and China\u2019s Zoomlion, the Finnish third wheel also gets to have some fun. Equipment maker Terex said Monday that it would sell a chunk of its [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2961,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":""},"categories":[2,3,8],"tags":[834,1203,1471,1640],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Everyone Is Sweet on Crane Maker Terex - MachineMarket Blog<\/title>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cranemarket.com\/blog\/why-everyone-is-sweet-on-crane-maker-terex\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Everyone Is Sweet on Crane Maker Terex - MachineMarket Blog\" \/>\n<meta property=\"og:description\" content=\"The courtship of the U.S. company may turn out to suit all parties, including Finland\u2019s Konecranes and China\u2019s Zoomlion The WSJ reports In the continuing date between America\u2019s Terex and China\u2019s Zoomlion, the Finnish third wheel also gets to have some fun. 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