Deal worth $160 million expected to close in 2014.
Terex Corp., Southaven, Miss., has agreed to sell its truck business to Volvo Construction Equipment, Shippensburg, Pa., for cash proceeds of approximately $160 million. The truck business manufactures and sells off-highway rigid and articulated haul trucks.
Included in the transaction is a manufacturing facility in Motherwell, Scotland, United Kingdom. The sale, which is subject to government regulatory approvals and other closing conditions, is targeted to close in the first half of 2014.
“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,” says Ron DeFeo, Terex chairman and CEO. “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.”
DeFeo continues, “The sale of the Truck business reflects our strategy to manage our portfolio of businesses and focus on those businesses that provide the greatest returns for our shareholders. We recently announced the initiation of quarterly cash dividends to our shareholders and a share repurchase program and the proceeds from this sale aid our efforts to improve our financial efficiency and implement these programs.”
Volvo CE President Pat Olney 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 at a time of renewed confidence in the sector. The addition of TEL’s (Terex Equipment Ltd.'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.”