Volvo Construction Equipment (Volvo CE) will acquire hauler manufacturer Terex Equipment Ltd (TEL) including related assets and intellectual property. Included in the transaction is TEL’s manufacturing facility in Motherwell, Scotland.
The sale, which is subject to UK government approvals and other customary conditions, should be completed in the first half of 2014.
“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,” said Ron DeFeo, Terex chairman and chief executive officer.
“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,” he continued.
The Terex Corporation is a global manufacturer of aerial work platforms, construction, cranes, material handling and port solutions and materials processing.
“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,” De Feo explained.
SCOPE FOR GROWTH
Volvo CE president Pat Olney declared that his company’s acquisition of Terex’s dump truck business offers 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,” he said.
The deal includes two product ranges that offer rigid and articulated haulers, and five models of rigid haulers with proven designs and payloads ranging from 32 to 91 tonnes.
The introduction of rigid haulers will extend Volvo CE’s position in light mining, an industry that is complementary to general construction, oil and gas, aggregates and quarrying and road building – segments in which Volvo CE is already active. The deal also sees three models of articulated hauler added to the Volvo portfolio, with payloads ranging from 25 to 38 tonnes.
If approved, the acquisition also adds 500 employees to Volvo CE’s existing workforce and allows for the continued use of the Terex brand name on the relevant machines for a transitional period.
The deal also includes the distribution of haulers in the US as well as a 25.2 per cent holding in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures and sells rigid haulers under the Terex brand in China.
Sources: Terex Corporation, Volvo Construction Equipment