Tadano to purchase Demag from Terex
23 February 2019
In its aim to “become No. 1 worldwide in the lifting equipment industry” as it engages in “further global growth,” Tadano Ltd. will purchase the Demag mobile crane business from Terex Corporation for approximately $215 million (approximately 23.6 billion yen).
Included in the transaction are the manufacturing facilities in Zweibrücken, Germany and multiple sales and service locations. The date of completion of stock and asset transfer is scheduled for mid-2019, upon the receipt of all necessary approvals in each related country.
“Demag, which is currently a Terex brand, has over 100 years of history and experience in the design and manufacture of world-class, large-capacity all terrain cranes and crawler cranes,” Tadano Ltd. said. “Through the acquisition of Demag, Tadano further seeks to meet customer needs with the addition of lattice-boom crawler cranes to our product lineup, as well as the enhancement of our line of all terrain cranes. We aim for a greatly expanded global presence as we strive toward our goal of becoming No. 1 worldwide in the lifting equipment industry.”
Upon the completion of the sale, this transaction will put Tadano in the lattice boom crawler crane business for the first time. Tadano currently produces rough terrain cranes and all terrain cranes for the global market.
In a press release issued on the evening of Friday, February 22, John Garrison, chairman and CEO of Terex, explained that Terex will continue to manufacture and support several specialized crane products, including tower cranes, pick and carry cranes and rough terrain cranes.
“The Demag Mobile Cranes business has been part of our company for almost two decades and produces world class products,” Garrison said. “The dedicated Demag Mobile Cranes team members have made significant contributions to Terex and to the crane industry. The sale is based on strong industrial logic, as the Demag Mobile Cranes business will become part of a global crane company with complementary products and capabilities. We are pleased to have entered into this agreement with Tadano, a strategic buyer who values the Demag Mobile Cranes brand, technology, distribution network and team members.”
This is a strategic acquisition that offers Tadano considerable scope for growth, according to Koichi Tadano, Tadano Ltd. representative director, president and CEO.
“The addition of the well-respected Demag brand of all terrain cranes and large crawler cranes range extends our product lines and options for customers,” said Tadano. ”The addition of the Demag branded mobile crane product lines will enhance our global position in this segment. We believe that the Zweibrücken facilities and its global team members, as well as the current distribution partners, are valuable to the future success of the business.”
As a part of the sale of the Demag brand, Terex will exit the North American mobile crane product lines manufactured in its Oklahoma City facility.
“These changes will simplify our Oklahoma City operation, which will continue to produce telehandlers and re-manufactured units for our Aerial Work Platforms segment and various products for our Materials Processing segment.” Garrison continued. “Although we are exiting the OKC-based mobile cranes products, we will continue to sell parts, and offer service and support to our customers.
“As we exit these products, we are also in discussions to sell our boom truck, crossover, and truck crane products lines,” Garrison said. “We will be in touch with those customers affected by the exit to discuss the transition.”
Terex will continue to manufacture Terex Utilities products at its Watertown, South Dakota facilities. Terex will also continue to manufacture Terex rough terrain cranes for the global market in Crespellano, Italy, Terex tower cranes in Fontanafredda, Italy, and Terex pick and carry cranes in Brisbane, Australia.
“These are strong businesses that will continue to be an important part of Terex,” Garrison said. “During these transitions, our global team is committed to providing exceptional service to all of our global customers, including those affected by these changes.”
According to Tadano, the agreement includes the stock acquisition of eight subsidiaries of Terex, as well as the acquisition of certain assets related to the Demag business. The total agreement price is equivalent to the enterprise value and is subject to adjustment at closing, Tadano said.
Tadano plans to use a mixture of its own cash reserves and borrowed funds to secure the total cash to be used in the transaction payment.
In August 2019, Tadano will celebrate the 100th anniversary of its founding.
“Along with our vision of ‘Pursuing further excellence for the world and the future,’ we hold true to the tenets of our founders by delivering products that contribute to the greater world.” Tadano said.