02 May 2011

Terex to launch a public tender offer for Demag cranes AG

02.05.2011 – Terex Corporation today announced that its German subsidiary, Terex Industrial Holding AG, Dusseldorf, has decided to make a voluntary cash public tender offer for the outstanding share capital of Demag Cranes AG at €41.75 per share. Terex says the proposed offer price represents a premium of approximately 41 percent to the last undisturbed share price, prior to the speculation regarding possible takeover interest in Demag, on October 6, 2010 of €29.65, and a premium of 15 percent to the closing price on April 29, 2011 of €36.30.

With net sales of $4.4 billion in 2010 according to Terex, it is a major global manufacturer operating in four business segments: Aerial Work Platforms, Construction, Cranes, and Materials Processing.  Demag, headquartered in Dusseldorf, Germany, is a leading provider of industrial cranes, crane components, harbor cranes and port automation technology.

Demag’s business is “highly complementary” to the existing Terex business, and the combination has compelling industrial logic. The combined entity would have had total revenues of about $5.8 billion in 2010 with a strong footprint in Europe and emerging markets, especially in China.

“Demag is a leader in industrial cranes and port technology, and our companies are highly complementary. By combining our businesses, we would add a new product category of industrial cranes and hoists, and create the leading worldwide player in port equipment,” said Ronald M. DeFeo, Terex Chairman and Chief Executive Officer. “Demag products are competitive and innovative. The company is professionally managed, with highly motivated staff, and Terex will draw on this for both Demag’s ongoing success – and the future of Terex as a whole. Terex intends to build on the strong brand and service franchise of Demag in Germany and abroad. This transaction is predicated upon growth and not cost reduction,” Mr. DeFeo continued.

Germany is already a strong market for Terex. Over the last ten years it has acquired four significant German businesses, one of them Demag’s former sister company Demag Mobile Cranes in 2002, whose turnover has more than doubled since. Today, Germany is Terex’s second-largest market and production base. About 22 percent of Terex’s global headcount are located in Germany.

Terex will be financing the total offer consideration of €884 million from its existing cash and an already committed debt financing. The tender offer will carry a minimum acceptance level condition of not less than 51 percent of all Demag shares outstanding.

The tender offer will be launched by Terex Industrial Holding AG, an indirect wholly-owned subsidiary of Terex, and will be subject to the terms and conditions to be set out in the offer document. The offer document is subject to approval by the German Federal Financial Supervisory Authority (Bundesanstalt für  Finanzdienstleistungsaufsicht, BaFin),  and  following  such  approval  will  be  made  available  on www.industrialholding-angebot.de.