Terex Corporation has announced the sale of its German compact construction business to Yanmar Holdings for about US$60 million.
Terex’s German business manufactures and sells mid/mini-excavators, wheeled excavators and compact wheel loaders. The transaction includes a manufacturing facility located in Crailsheim, Germany and a parts distribution centre in Rothenburg.
“We are pleased to enter into this agreement with Yanmar, as they represent a strong strategic buyer for this business who values our quality designs, global team members and distribution partners,” Terex president and CEO John Garrison says.
The purchase comes hot on the heels of last month’s sale of Terex’s Material Handling and Port Solutions business (MHPS) to Finnish crane manufacturer Konecranes for about US$1.3 billion.
Terex Corporation owns 25 percent of Konecranes, so will still see profits from the MHPS and has the right to nominate two directors.
“We expect this sale to be accretive to Terex’s earnings per share,” Garrison says.
“The proceeds will significantly reduce Terex’s debt levels and improve our balance sheet, providing us with the ability to buy back shares and invest in our remaining businesses. As a 25 percent shareholder of Konecranes, Terex will be able to share in the synergies and economic upside of the combined MHPS and Konecranes businesses.”
The Terex board had been in talks previously with Chinese equipment manufacturer Zoomlion, with the latter reportedly interested in purchasing Terex Corporation as a whole (including the MHPS). These talks fell through when the Terex board deemed their offer unacceptable.
In 2014 Terex Corporation sold its truck hauler business to Volvo Construction Equipment. The US$160 million sale included Terex’s truck manufacturing plant in Scotland, the US distribution rights for the trucks and 25.5 percent stake in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures and sells rigid dump trucks under the Terex name in China.