Volvo Construction Equipment to acquire Terex truck business for US$160 million
TEREX Corporation have today announced that they have agreed to sell their truck business, Terex Equipment Ltd (TEL), including related assets and intellectual property, to Volvo Construction Equipment for approximately US$160 million in cash.
The sale includes five models of rigid haulers, with proven designs and payloads ranging from 32 to 91 tons. The introduction of rigid haulers will extend Volvo CE’s position in light mining; an industry area that is complementary to the general construction, aggregates, quarrying and road building segments that Volvo CE are already active in.
The deal also sees a further three models of articulated hauler added to the Volvo portfolio, with payloads ranging from 25 to 38 tons. These machines will support Volvo CE’s already established position in the articulated hauler segment, as well as offering an extensive field population and opportunities for considerable growth in emerging economies.
The deal includes TEL's main production facility in Motherwell, Scotland, and the distribution of haulers in the US, as well as a 25.2% holding in Inner Mongolia North Hauler Joint Stock Co. (NHL), who manufacture and sell rigid haulers under the Terex brand in China.
The sale, which is subject to government regulatory approvals and other customary closing conditions, is targeted to close in the first half of 2014. If approved, the acquisition will add some 500 employees to Volvo CE’s existing workforce. It will also allow for the continued use of the Terex brand name on the relevant machines for a transitional period.
Ron DeFeo, chairman and chief executive officer of Terex, said: ‘The truck business has been an important part of our company for more than three decades and continues to produce world-class products with dedicated and talented employees. However, trucks no longer fit within our changing portfolio of lifting and material handling businesses.
‘I am confident that the truck business will benefit by joining a company sharing similar competencies and offering complementary products and services. We are pleased to have entered into this agreement with Volvo, who represent a strong strategic buyer for the business and who value our distribution network and team members.’
Mr DeFeo continued: ‘The sale of the truck business reflects our strategy to manage our portfolio of businesses and focus on those businesses that provide the greatest returns for our shareholders.
Commenting on the rationale of the deal, Volvo Construction Equipment’s president, Pat Olney, said: ‘This is a strategic acquisition that offers Volvo CE considerable scope for growth. The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications at a time of renewed confidence in the sector.
‘The addition of TEL’s articulated hauler range will enhance our position in this segment, particularly in high-growth markets. We believe that the Motherwell facility and its global team members, as well as the current distribution partners, are valuable to the success of the business in the future.’