Terex Corp. announced that the minimum acceptance level of 51 percent for the voluntary public tender offer by Terex Industrial Holding AG to Demag Cranes shareholders at €45.50 per share has been surpassed. With about 67 percent of outstanding Demag shares accepted — about 68 percent together with the shares of Demag previously purchased by Terex — the acquisition of Demag by Terex is the largest acquisition in the Westport, Conn.-based company’s history.
Terex also said it received early termination under the Hart-Scott-Rodino Anti-trust Act, and has formally filed the transaction with the European Commission.
According to the German Securities Acquisition and Takeover Act, shareholders of Demag who have not accepted the offer during the acceptance period that expired at midnight June 30, will have the opportunity to tender their shares during an additional acceptance period of two weeks following the publication of the final tender results. The completion of the offer still remains subject to customary closing conditions, including clearance by the European Commission.
“With the addition of Demag Cranes to the Terex Group, we will add a new business segment with world-class products in industrial cranes/hoists and port technology,” said Terex chairman and CEO Ron DeFeo. “The success of our offer demonstrates the confidence in the compelling industrial rationale of this deal and the growth opportunities for both companies.”
Demag Cranes, based in Dusseldorf, Germany, is a leading provider of industrial cranes, crane components, harbor cranes and port automation technology. Its business is viewed as complementary to the existing Terex business. The combined entity would have total revenues of about $5.8 billion in 2010, with a strong footprint in Europe and emerging markets, especially in China.
Terex offered €45.50 per share for Demag, representing a premium of about 25 percent to the closing share price of €36.60 on April 29. The offer price represents a 53-percent premium to the last share price before speculation regarding possible takeover interest began on October 6, 2010, when the price was €29.65 at closing.
The acceptance of the offer represents an extraordinary victory for DeFeo after Terex’s initial offer of €41.75 was spurned by Demag shareholders and executives, and the refusal by Demag CEO Aloysius Rauen to meet with DeFeo. However, following a series of meetings, Terex disclosed June 16 that it had raised its offer to €45.50 and said it would grant Demag’s management autonomy to operate Demag’s business under Terex ownership, also agreeing to honor existing union contracts and shop agreements provided by Demag.
