Wacker Construction Equipment AG, based in Munich, and Neuson Kramer Baumaschinen AG, Linz, Austria, recently announced plans to merge during the course of 2007. The shareholders of both companies and management of Wacker Construction Equipment AG recently signed a letter of memorandum agreeing to the merger. The new company will be called Wacker Neuson AG.

Wacker generated sales of € 619.3 million (about U.S. $835.3 million, according to current conversion rates) in 2006, and NKB had about € 260 million (about U.S. $350 million) for its fiscal year from February 1 through January 31.

The transaction is contingent upon approval of anti-trust authorities.

The planned merger brings together two profitable, family-run companies to create a global manufacturer of light and compact equipment.

“We are convinced that the high-quality portfolios of both companies provide a perfect springboard to capitalize on growth opportunities in the compact equipment segment in the mainstream construction, gardening and landscaping markets in Europe, the U.S., and Asia,” said Dr. George Sick, president and CEO of Wacker Construction Equipment AG and Hans Neunteufel, CEO and main shareholder of NKB in a joint statement.

“Both companies were on the path to success and would have continued to thrive irrespective of the merger,” added Neunteufel and Dr. Ulrich Wacker, president of Wacker’s board of supervisors. “However, the merger does open up a new dimension, paving the way for a strong position in the global compact and light equipment market.”

Both companies said their product portfolios are mutually complementary, and the user base, target markets and sales channels are practically identical. “We plan to fully leverage existing sales channels and distribution agreements in Europe to the benefit of our customers and business partners,” said Neunteufel.

Sick added that Neuson Kramer’s excavators and wheel loaders are a perfect complement to Wacker’s rental pool of products.

Wacker was founded in 1848 as a blacksmith’s shop and now operates globally with more than 250 product categories and complementary rental, spare parts and repair services. The company has more than 160 sales and service locations in more than 30 countries. In fiscal 2006, Wacker increased sales by 23.1 percent, and profit before interest and tax by 51.3 percent to € 76.7 million (about U.S. $103 million). The company is almost exclusively owned by the Wacker family.

NKB’s product portfolio includes mini and compact excavators, wheel loaders, dumpers, telescopic loaders and compact loaders. It grew sales 31 percent in its latest fiscal year and increased profit before interest and tax by 47.5 percent to € 44.7 million (about U.S. $60 million.)