Sale of iconic brand for $215m based on strong industrial logic, says Terex chairman
Terex Corporation has announced that it has agreed to sell its Demag Mobile Cranes business to Japanese crane product specialist Tadano Ltd for an enterprise value of approximately $215 million.
The Demag Mobile Cranes business manufactures and sells all-terrain cranes and large crawler cranes. The Demag brand, which was resurrected by Terex at the last edition of Bauma in 2016, is an iconic crane brand in the field of both mobile and crawler cranes.
Included in the transaction are manufacturing facilities in Zweibrucken, Germany, and multiple sales and service locations. The sale, subject to government regulatory approvals and other customary closing conditions, is targeted to close in mid-2019.
“The Demag Mobile Cranes business has been part of our company for almost two decades and produces world-class products,” said John L. Garrison, Terex chairman and CEO. “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.”
A statement form Tadano said: “Through the acquisition of Demag, Tadano further seeks to meet customer needs with the addition of lattice-boom crawler cranes to our product line-up, 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.”
Commenting on the rationale of the deal, Koichi Tadano, representative director, president and CEO, Tadano Ltd, said: “This is a strategic acquisition that offers Tadano considerable scope for growth. 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.
“The addition of the Demag branded mobile crane product lines will enhance our global position in this segment. We believe that the Zweibrucken facilities and its global team members, as well as the current distribution partners, are valuable to the future success of the business.
In addition to selling Demag, Terex will cease the production of mobile cranes in North America (made in Oklahoma City). However, it will continue to manufacture rough-terrain cranes for the global market in Crespellano, Italy, and Terex tower cranes in Fontanafredda, Italy. The Terex pick-and-carry cranes made in Brisbane, Australia, will also be continued.
Although it is exiting the Oklahoma-based mobile cranes products, Garrison said Terex “will continue to sell parts, and offer service and support to our customers” and added that during the transition Terex was ”committed to providing exceptional service to all of our global customers, including those affected by these changes”.