Volvo CE buys Terex hauler business
09 December 2013
Terex has agreed to sell its rigid and articulated hauler business to Volvo Construction Equipment for US$160 million.
The deal, which is subject to regulatory approvals, includes the Terex plant in Motherwell, UK, and a 25.2% share of Inner Mongolia North Hauler Joint Stock Co, which produces and sells rigid haulers under the Terex brand in China.
The acquisition will give Volvo CE a range of rigid haulers from 32 to 91 tonnes capacity, extending its coverage in the quarrying and light mining sectors. The Motherwell plant also makes three articulated hauler models. Volvo already has competitor machines in its range, but says the Terex models would give it opportunities for growth in emerging economies.
Terex, which has been manufacturing trucks at Motherwell for more than 30 years, said the business no longer fitted with its lifting and material handling business, predominantly cranes and aerial platforms.
Regulatory approvals are required, but a spoksman for Volvo CE told IRN that the company does not anticipate significant anti-trust issues.
The business being sold reported revenues of $370 million in 2012 with operating profits of $33 million, although profit levels have fallen this year, with the first nine months of 2013 seeing sales of $172 million and operating profits of $5.5 million.
Volvo CE president, Pat Olney said: “This is a strategic acquisition that offers Volvo CE considerable scope for growth. The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications at a time of renewed confidence in the sector.
”The addition of TEL’s articulated hauler range will enhance our position in this segment, particularly in high-growth markets. We believe that the Motherwell facility and its global team members, as well as the current distribution partners, are valuable to the success of the business in the future.”
Ron DeFeo, Terex chairman and chief executive officer, said; ”The truck business has been an important part of our company for more than three decades and continues to produce world class products with dedicated and talented employees. However, trucks no longer fit within our changing portfolio of lifting and material handling businesses.
“I am confident that the truck business will benefit by joining a company sharing similar competencies and offering complementary products and services. We are pleased to have entered into this agreement with Volvo, which represents a strong strategic buyer for the business who values our distribution network and team members.”
The business being acquired employs around 500 people, most based in Motherwell. A spokesman for Volvo CE told IRN that production will be maintained at the Motherwell plant for the foreseeable future.
The transaction is expected to be finalised during the second quarter of 2014. The transaction includes the use of the Terex brand for a transitional period.