Cargotec and Konecranes to merge

A combination agreement has been signed today, 1 October, to merge crane manufacturers Cargotec and Konecranes.

Combined annual sales of the new company will be around € 7.0 billion. Operating profit will be approximately € 565 million on 2019 figures.

Cargotec said the agreement will form “a customer-focused global leader in sustainable material flow.” It will put together crane brands Hiab, Effer, Loglift, Jonsered, Argos, Kalmar and MacGregor, from Cargotec, with Konecranes, which includes the following brands: Konecranes, Gottwald, Demag (not the all terrain or crawler cranes), P&H, SWF, Morris, R&M, Verlinde, Noell and Meiden, among others (in both cases).

A Cargotec statement said, “The future company is well positioned to lead the industry shift towards increased sustainability based on intelligent solutions, by being a lifecycle partner for its customers and prioritising safety in all its activities.”

The plan is for Konecranes to be merged into Cargotec. Cargotec said it will issue new shares without payment to the shareholders of Cargotec in proportion to their existing shareholding by issuing two (2) new class A shares for each class A share and two (2) new class B shares for each class B share, including new shares to be issued to Cargotec for its treasury shares. Upon completion, Konecranes’ shareholders will receive as merger consideration 0.3611 new class A shares and 2.0834 new class B shares in Cargotec for each share they hold in Konecranes on the record date.

In the above case Konecranes and Cargotec shareholders would each own half of the shares and votes of the new company.

The somewhat convoluted history of the companies includes the following: Konecranes started building hoists in the 1930s and harbour cranes in the 1950s and has been an independent company since the 1990s when Kone Corporation split up and KCI Konecranes became a separate business on 15 April 1994. It dropped the KCI prefix in 2006. Before and after that it acquired multiple industrial crane brands around the world, culminating with the acquisition of the Materials Handling and Port Solutions business of Terex in 2017.

In 2002 Kone Corporation, acquired Partek, parent of Hiab (which it had bought in 1985) and Kalmar and a bigger business than Kone. The new business was called Kone Cargotec. Soon after, in 2005, Kone was demerged and split into two: Kone Corporation and Cargotec Corporation. Kone was lifts (elevators) while Cargotec got the cranes, later adding MacGregor offshore cranes, plus Effer and others.