Demag Cranes welcomes announced improvement in Terex offer terms
Düsseldorf, 16. June 2011
- Planned raising of the offer price from EUR 41.75 to EUR 45.50 per share represents a premium of 29.3 per cent over the three-month weighted average share price before the announcement of the tender offer
- Business Combination Agreement secures wide-ranging independence for Demag Cranes and contains extensive guarantees to safeguard locations and jobs
Demag Cranes AG welcomes the announcement by Terex Industrial Holding AG that it will substantially increase the offer price of the voluntary public tender offer it submitted to the shareholders of Demag Cranes AG on 19 May 2011. A complete evaluation of the new offer terms will be presented by the Management Board and Supervisory Board of Demag Cranes AG in a supplementary statement pursuant to Section 27 of the German Securities Acquisition and Takeover Act (WpÜG) presumably until 22 June 2011. The increase in the offer price from EUR 41.75 to EUR 45.50 per share announced by Terex is part of a Business Combination Agreement signed today by Terex and Demag Cranes after the approval by their relevant boards. The agreement ensures broad operational and strategic autonomy to Demag Cranes even after Terex has acquired a majority interest in the company. The agreement additionally improves the offer document dated 19 May with regard to the intentions and objectives of the possible takeover, particularly with a view to the future strategy of Demag Cranes and the interests of the company’s stakeholders. Moreover, the document includes detailed commitments for the period after a possible integration of Demag Cranes into Terex Group. Demag Cranes’ Chief Executive Officer Aloysius Rauen: “Apart from a significant increase of the offer price, we achieved important assurances by Terex regarding the interests of our employees, which in total significantly improve the original offer.”
Specifically, the two parties agreed on the following points:
- After a majority takeover by Terex, Demag Cranes will remain an independent operating segment within Terex Group pursuing its existing business activities. Strategic and operational responsibility for the business will remain with the management board.
- Terex fully supports Demag Cranes’ strategy and will back its continued implementation in order to further strengthen the leading position of Demag Cranes in its current business segments. Besides the Management Board’s plan to develop the mid-market segment, this includes further expansion in emerging markets and notably the further pursuance of the planned strategic alliance between Demag Cranes and Weihua in China.
- For a period of three years, Terex guarantees that it will not cause Demag Cranes to announce enforced redundancies as a direct result of the transaction. In addition, Terex pledges to fully uphold shop agreements and collective bargaining agreements as well as other employee rights.
- Demag Cranes’ headquarters will remain in Düsseldorf. For Demag Cranes’ German production sites Wetter, Düsseldorf, Uslar and Luisenthal Terex gave a site preservation guarantee for five years. The strong and successful brands Demag and Gottwald will be preserved.
- As innovation and technology leader in its industry, Demag Cranes will continue to take responsibility for its research and development activities in the future.
- Even after the possible acquisition of a majority shareholding and until the effectiveness of a Domination Agreement, Demag Cranes Group will retain its full financial autonomy, including decisions about the dividend policy.
- After the proposed takeover, Demag Cranes will be represented by its CEO in the executive leadership team of Terex Group.
CEO Aloysius Rauen comments: “Also as part of the Terex Group, Demag Cranes will be able to further pursue its clear and successful growth strategy in the integrated structures we have built. We will additionally profit from access to international markets as well as the Terex Group’s network. Therefore, the transaction Terex intends to undertake will create value for all of our stakeholders.”
The new offer price proposed by Terex of EUR 45.50 per share represents a premium of 29.3 per cent over the three-month weighted average share price of Demag Cranes before the announcement of the tender offer and a premium of 53.5 per cent over the price on 6 October 2010, the last day before takeover speculations arose. A complete evaluation of the new offer conditions will be presented by the Management Board and Supervisory Board of Demag Cranes AG in a supplementary statement pursuant to Section 27 of the German Securities Acquisition and Takeover Act (WpÜG) presumably until 22 June 2011. Pending this opinion, however, the Management Board of Demag Cranes AG is confident based on today’s Business Combination Agreement that it will in total be able to recommend that the company’s shareholders accept the improved offer.
The Business Combination Agreement can be viewed on the company’s website at http://www.demagcranes-ag.de/en/Investor_Relations/Tender_Offer/index.jsp.
About Demag Cranes
The Demag Cranes Group is one of the world’s leading suppliers of industrial cranes and crane components, harbour cranes and terminal automation technology. Services, in particular maintenance and refurbishment services, are another key element of the Group’s business activities. The Group is divided into the business segments Industrial Cranes, Port Technology and Services and has strong and well-established Demag and Gottwald brands. Demag Cranes sees its core competence in the development and construction of technically sophisticated cranes and hoists as well as automated transport and logistics systems in ports and terminals, the provision of services for these products and the manufacture of high-quality components.
As a global supplier, Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries such as Demag Cranes & Components GmbH and Gottwald Port Technology GmbH, agencies and a joint venture. In financial year 2009/2010, the Group, with its 5,711 employees, generated revenue of EUR 931.3 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the Frankfurt Stock Exchange and is traded on various indices including the MDAX®.
Demag Cranes AG. We Can Handle It.
Conditions for forward-looking statements
This press release contains forward-looking statements relating to the business, financial performance and earnings of Demag Cranes AG and its subsidiaries and associates. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which in general are beyond the control of Demag Cranes AG. Consequently, actual developments as well as actual earnings and performance may differ materially from those which are explicitly or implicitly assumed in the forward-looking statements. Demag Cranes AG does not intend or accept any obligation to publish updates of these forward-looking statements.