May 31, 2016
CHANGSHA, May 31 (Xinhua) -- Chinese construction equipment maker Zoomlion said Tuesday that failure to agree on price was the only reason for terminating the deal to acquire U.S. crane maker Terex.
Sun Changjun, vice president of Zoomlion, told Xinhua that it is tempting for foreign companies to attribute the failure of a Chinese takeover to non-market factors such as government control.
Zoomlion proposed acquiring Terex at 31 U.S. dollars per share in March. After Terex decided to sell its material handling and port solutions (MHPS) business to Finland's Konecranes, Zoomlion asked that its bid be revised down.
Terex said in a press release on Friday last week that Zoomlion "was unable to provide a fully financed, binding proposal for the purchase of Terex with or without MHPS. This ends the prolonged period of uncertainty that this process has brought to Terex and its customers, team members and shareholders."
Previous media reports have suggested that the deal could have fallen through on foreign exchange controls, a funding shortfall or lack of Chinese government support.
However, Sun said that Zoomlion had already secured written approval from China's National Development and Reform Commission ahead of the first round of non-binding bidding in November last year. The deal is also not subject to foreign exchange control as authorities encourage equipment manufacturers to seek cooperation abroad.
Zoomlion's offer, Sun said, was 40 percent funded by the company's own cash and 60 percent by bank loans. He said the company had received commitment letters from several Chinese banks, refuting concern over Zoomlion's ability to secure funding.
Though talks with Zoomlion are terminated, Terex said the sale of its MHPS business to Konecranes for approximately 1.3 billion dollars will proceed.
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