Chinese firm in £2.5bn bid for heavy equipment giant Terex
The Chinese construction company Zoomlion has confirmed its offer for Terex Corporation, which employs 1,000 people in Co Tyrone, saying the combination of the two would create a firm with a "global footprint".
The heavy equipment giant last month attracted the $3.3bn (£2.5bn) bid from Zoomlion, after already agreeing to join forces with Finnish firm Konecranes.
But the Chinese firm said it now had a "concrete financing plan" in place for the proposed transaction, which would be 40% cash and 60% bank financing. And Zoomlion said it believed the deal "offered "strategic benefits to both companies".
Terex's products of work platforms, cranes and material handling would complement Zoomlion's products such as construction machinery, environmental equipment and agricultural machinery, it said. It would also provide a good mix of markets.
"Terex's market is mainly concentrated in the USA and Europe, while Zoomlion's presence is mainly in China and the emerging markets," a spokesman added.
"After the completion of the proposed transaction, the emerged company will be able to achieve a global footprint."
The spokesman also claimed Terex's "advanced manufacturing and technology" would benefit from Zoomlion's production capacity and cost advantages, adding: "The company would look to Terex's international management team to bring significant global experience and knowledge to the merged company."
The offer comes after Terex Corporation announced income from continuing operations of $14.6m (£10.2m) for the last three months of 2015- down from $79.9m (£56m) in the fourth quarter of 2014.
Net sales at the company were $1.6bn (£1.1bn), down from $1.8bn (£1.3bn).
Full-year income from continuing operations was $142.5m (£100m) on net sales of $6.5bn (£4.6bn), down from $259m (£182m) on net sales of $7.3bn (£5bn) for 2014.
Terex president and chief executive John Garrison said: "The macro operating environment in the fourth quarter was challenging. Global economic volatility has made our customers more cautious overall, resulting in fourth quarter order activity that was below expectations in most business segments and product categories.
"On a positive note, free cashflow for the year came in at a strong $290m, nearly double our 2015 net income. Cash flow generation will be a primary focus going forward."
Mr Garrison added he was not anticipating improvement in market conditions in 2016, explaining: "We anticipate lower fleet replacement from north American aerial work platform rental customers.
"The oil and gas and commodity market decline will continue to impact demand across many of our products.
"We are developing and implementing plans to align our cost structure with these market realities. We expect 2016 earnings per share to be between $1.30 and $1.60, excluding restructuring and other unusual items, and net sales to be about 10% lower than 2015."
Wayne Horwood, managing director of corporate financing firm HNH, said this month that a Zoomlion deal for Terex could be the first of many incursions by Chinese firms into Northern Ireland, adding: "I would not be surprised that, with a slowing Chinese internal economy and weakening currency, large Chinese corporations would seek to access other markets and currencies for mergers and acquisitions."