Konecranes and Cargotec to Merge

By Anne Kauranen
Thursday, October 1, 2020

Finnish engineering firm Konecranes and cargo handling machinery maker Cargotec plan to merge to help speed up innovation and reap savings, they said on Thursday, sending both of their shares sharply higher.

The boards of the companies, which provide road and sea-cargo handling machinery and services to industries, factories, ports and terminals, said they had signed a plan under which Konecranes would be folded into Cargotec in a merger of equals.

Cargotec shares jumped around 25%, while Konecranes stock was up around 17%, giving a combined market value of around 4.5 billion euros ($5.3 billion), according to Refinitiv Eikon data.

A merger would bring Konecranes back into the hands of Finland's richest family, the Herlins, who are reported to have regretted divesting the company from liftmaker Kone back in 1994.

Ilkka Herlin, Cargotec’s chairman and its largest owner via his investment company, told reporters a potential merger had been touted for a while, but that now was the right time to help develop greener and more automated technologies for customers.

“Together we are stronger and our combined R&D resources will enable us to accelerate innovation in automation, robotics, electrification and digitalization,” Cargotec CEO Mika Vehvilainen said.

Combined annual sales are about 7 billion euros, while operating profit would have been approximately 565 million euros based on the 2019 fiscal year, Konecranes said.

The new company aims for a comparable operating profit margin of more than 10% and expects annual cost savings of about 100 million euros within three years of completion of the deal, Konecranes added.

The new group will be chaired by Konecranes Chairman Christoph Vitzthum and a new chief executive will be nominated later, the companies said.

Konecranes shareholders will receive 0.3611 new class A shares and 2.0834 new class B shares in Cargotec for each Konecranes share they hold.

That will result in Konecranes shareholders owning about 50% of the shares and votes in the company, it said.

Shareholders representing 76.3% of Cargotec votes and 27.4% of Konecranes votes have irrevocably committed to back the deal.

The Finnish government’s investment arm, Solidium, which is the second biggest shareholder in Konecranes with a 8.51% stake, said it supported the plan.

The companies expect to get clearance from competition authorities in all necessary jurisdictions during 2021, Konecranes CEO Rob Smith told analysts in a call.


($1 = 0.8515 euros)

(Reporting by Anne Kauranen; Editing by David Clarke and Mark Potter)

Categories: Technology Marine Equipment Mergers & Acquisitions Industry News Hardware Cranes

Related Stories

Beam’s AI-Driven AUV to Hit Offshore Wind Market in 2025

Blackford Dolphin Kicks Off Long-Term Drilling Campaign Offshore India

Petronas to Proceed with South China Sea Oil and Gas Exploration

SBM Offshore’s FPSO for ExxonMobil’s Guyana Oil Project Takes Final Shape (Video)

Korea's Hanhwa Sets Out Plan for Full Takeover of Singapore's Dyna-Mac

1.1 GW Floating Offshore Wind Farm earns Key Approval

Petronas, ADNOC, Storegga Target 5M tons per year of Carbon Capture

A Hydrogen Balancing Act in Offshore Energy

"World's Most Powerful Floating Wind Turbine" Sets Sail

Jadestone Energy Secures Four Shallow Water Fields Offshore Malaysia

Current News

Sapura Scoops Petrobras Contract for Pan-Malaysia Offshore Services

Velesto’s Drilling Rigs Up for Automatization Overhaul Under New Tech Alliance

US Firm Finds Chinese Partner to Deliver Mobile Offshore Drilling Units

TotalEnergies and Oil India to Jointly Tackle Methane Emissions Issues

Keppel Reclaiming Control of 13 Rigs to Cash In on Offshore Drilling Market's Growth

Global Offshore Wind Stumbles to the End of '24

Seatrium Delivers Fifth Jack-Up to Borr Drilling

Malaysia's FPSO Firm Bumi Armada Eyes Merger with MISC’s Offshore Unit

Global OTEC Presents OTEC Power Module for Remote Offshore Platforms

Beam’s AI-Driven AUV to Hit Offshore Wind Market in 2025

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com