Zoom­lion of­fers $3.2 bil­lion for US heavy ma­chin­ery maker

China Daily (Canada) - - LIFE - By YANG ZIMAN and FENG ZHIWEI in Chang­sha

China’s Zoom­lion Heavy In­dus­try Sci­ence & Tech­nol­ogy Co con­firmed on Wed­nes­day an un­so­licited takeover bid for Terex Corp, the US crane and con­struc­tion ma­chin­ery maker.

The deal will be vi­tal to Zoom­lion’s trans­for­ma­tion and the im­ple­men­ta­tion of the com­pany’s global strat­egy, and it will help in­crease Zoom­lion’s rev­enue and prof­its.

Ac­cord­ing to a Terex state­ment, Zoom­lion has of­fered $30 per share for the com­pany, valu­ing it at $3.2 bil­lion.

The of­fer is twice Terex’s stock price onMon­day, which closed at $15.01 per share in New York. The shares surged 37 per­cent on Tues­day to $20.5, push­ing its mar­ket cap­i­tal­iza­tion to $2.2 bil­lion.

The Terex board said it is care­fully re­view­ing the Zoom­lion pro­posal to de­ter­mine what course of ac­tion is in the best in­ter­ests of its share­hold­ers.

Be­fore the Zoom­lion of­fer, Terex had agreed to merge with Fin­land equip­ment man­u­fac­tur­erKonecranes to cre­ate a crane and ma­te­ri­als han­dling sup­plier with a com­bined $10 bil­lion in sales. Af­ter the merger, the com­pany planned to change its name into Konecranes Terex Plc and move its base to Fin­land.

Founded in 1992, Zoom­lion is mainly en­gaged in man­u­fac­tur­ing high-tech equip­ment for the agri­cul­tural, build­ing, en­ergy, en­vi­ron­men­tal, and trans­portengi­neer­ing sec­tors.

The first main­land con­struc­tion ma­chin­erycompany to be listed on both the Shang­hai and Hong Kong stock ex­changes, Zoom­lion has man­u­fac­tur­ing bases in Italy, Ger­many, In­dia and Brazil.

China’s equip­ment man­u­fac­tur­ing in­dus­try was hit hard by China’s eco­nomic slow­down last year. Dur­ing the first half of the year, the 18 ma­jor listed con­struc­tion ma­chin­ery firms re­ported com­bined op­er­a­tional rev­enue of 50 bil­lion yuan ($7.58 bil­lion), a 29.31 per­cent fall on the same pe­riod in 2014.

“China’s equip­ment man­u­fac­tur­ing sec­tor is in the mid- to down­stream of the global pro­duc­tion chain,” said Chen Chao­fan, an eco­nom­ics pro­fes­sor with the School of Eco­nom­ics and Re­source Man­age­ment at Bei­jing Nor­mal Univer­sity.

“It needs to learn from de­vel­oped coun­tries in terms of tech­nol­ogy and ex­per­tise and over­seas pur­chase is a good way to strengthen pro­duc­tion ca­pac­ity,” Chen said.

It needs to learn from de­vel­oped coun­tries in terms of tech­nol­ogy and ex­per­tise.”

Wen Zhengxin con­trib­uted to this story.

Con­tact the writ­ers at yangz­i­man@chi­nadaily.com.cn and fengzhi­wei @chi­nadaily.com.cn

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