The voluntary cash public tender offer is for the outstanding share capital of Demag Cranes at a price of €41.75 (£36.98) per share. The proposed offer price represents a premium of about 41% over the last undisturbed share price, prior to speculation in October regarding possible takeover interest in Demag. It represents a premium of 15% on Friday’s closing price of €36.30.
Terex sees Demag’s business as highly complementary to its own. The combined entity would have had total revenues of about US$5.8bn (£3.47bn) in 2010 with a strong footprint in Europe and emerging markets, especially in China.
“Demag is a leader in industrial cranes and port technology, and our companies are highly complementary, said Terex chairman and chief executive officer Ronald DeFeo. "By combining our businesses, we would add a new product category of industrial cranes and hoists, and create the leading worldwide player in port equipment. Demag products are competitive and innovative. The company is professionally managed, with highly motivated staff, and Terex will draw on this for both Demag’s ongoing success - and the future of Terex as a whole. Terex intends to build on the strong brand and service franchise of Demag in Germany and abroad. This transaction is predicated upon growth and not cost reduction.”
Over the last 10 years, Terex has acquired four significant German businesses, including Demag’s former sister company Demag Mobile Cranes.
Terex said that it will be financing the total offer consideration of €884 million from its existing cash and debt financing that is already committed. The tender offer will carry a minimum acceptance level condition of not less than 51% of all Demag shares outstanding.
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