Slowdown or not - companies that have been sowing for the much-awaited upturn seems busy in product diversification - be it through in-house development or through the acquisition route. In a move that will improve the company's penetration in the core earthmoving segment and extend its presence in light mining, Volvo Construction Equipment has agreed to acquire the off-highway hauler business of the Terex Corporation for a purchase consideration of approximately USD 160 M (approx. SEK 1 billion) on a cash and debt free basis.
In the recent announcement Volvo CE has agreed with the Terex Corporation to acquire the hauler manufacturer Terex Equipment Ltd including related assets and intellectual property. The deal, which is subject to regulatory approval, includes the main production facility in Motherwell, Scotland and two product ranges that offer both rigid and articulated haulers. It also includes the distribution of haulers in the U.S. as well as a 25.2 per cent holding in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures and sells rigid haulers under the Terex brand in China. NHL is listed on the Shanghai Stock Exchange.
Volvo CE's president, Pat Olney, President, Volvo CE says, "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."
The acquisition includes five models of rigid haulers, with proven designs and payloads ranging from 32 to 91 tons. The introduction of rigid haulers will extend Volvo CE's position in light mining; an industry area that is complementary to general construction, oil and gas, aggregates and quarrying and road building - segments that Volvo CE is already active in.
The deal also sees a further three models of articulated haulers added to the Volvo portfolio, with payloads ranging from 25 to 38 tons. These machines support Volvo CE's already established position in the articulated hauler segment, and offer an extensive field population and opportunities for considerable growth in emerging economies. If approved, the acquisition adds some 500 employees to Volvo CE's existing workforce. It also allows for the continued use of the Terex brand name on the relevant machines for a transitional period. The transaction is expected to be finalized during the second quarter of 2014. For implementation, approval is required from relevant authorities.