Terex has announced that it will sell its Demag mobile crane business to Tadano and stop producing cranes in North America.

The deal includes the Demag manufacturing facilities in Zweibrücken, Germany along with multiple sales and service locations including the equity in eight companies:
Terex Cranes Germany
Terex Scandinavia
Terex Cranes Spain
Terex Cranes UK
Terex France
Terex Cranes Real Estate – France
Terex Cranes Real Estate – Germany
Demag IP Holdings

Tadano is paying around $215 million for the entire Demag business, which it says is roughly equivalent to its enterprise value.

The transaction is expected to close mid year, subject to regulatory approvals. Terex will continue to manufacture tower cranes and Rough Terrain cranes in Italy. While the Franna pick & carry cranes in Australia will join the Terex Materials Processing business. The company also announced plans to cease manufacturing cranes in North America which are currently made at a shared Terex plant in Oklahoma City.

Terex chief executive John Garrison said: “The dedicated Demag Mobile Cranes team members have made significant contributions to Terex and to the crane industry. The sale is based on strong industrial logic, as the Demag Mobile Cranes business will become part of a global crane company with complementary products and capabilities. We are pleased to have entered into this agreement with Tadano, a strategic buyer who values the Demag Mobile Cranes brand, technology, distribution network and team members.”

“In addition to selling the Demag business, Terex will exit the North American mobile crane product lines manufactured in our Oklahoma City facility. These changes will simplify our Oklahoma City operation, which will continue to produce telehandlers and re-manufactured units for our Aerial Work Platforms segment and various products for our Materials Processing segment. Although we are exiting the OKC-based mobile cranes products, we will continue to sell parts, and offer service and support to our customers.”

Tadano chief executive Koichi Tadano added: “This is a strategic acquisition that offers Tadano considerable scope for growth. The addition of the well respected Demag brand of All Terrain cranes and large crawler cranes range extends our product lines and options for customers. The addition of the Demag branded mobile crane product lines will enhance our global position in this segment. We believe that the Zweibrücken facilities and its global team members, as well as the current distribution partners, are valuable to the future success of the business.”

A letter from John Garrison to Terex Crane customers is published in full below:

Dear Valued Customer,

“For the past three years, we have been on a journey to transform Terex into a high performing, customer-focused company. Today we are announcing two significant steps in this journey.”

“Terex has reached an agreement to sell the Demag Mobile Cranes business to Tadano Ltd.. The sale is expected to close in mid-2019, and transition details will be communicated in the coming months. In addition, we will exit the North American mobile crane product lines manufactured in our Oklahoma City facility. We will be in touch with those customers affected by the exit to discuss the transition. Terex will continue to manufacture and support several specialized crane products, including Tower cranes, Pick and Carry cranes, and Rough Terrain cranes.”

“We want to assure you that Terex is committed to supporting your business on an ongoing basis with the parts and services needed to keep all of your Terex cranes working for you. This includes those products we are exiting and those we will continue to offer, as well as Demag Mobile Cranes business through the transition of ownership and services to Tadano.”

“We believe the sale of the Demag Mobile Cranes business to Tadano is good for our customers. It will create a company that is stronger together, with a common core business of lifting. Combining Tadano’s 100 years of experience with Demag Mobile Cranes’ nearly two centuries will create a global lifting company capable of bringing new leadership to the industry and continuing to create innovative lifting solutions for you.”

“We will continue to manufacture Rough Terrain cranes for the global market in Crespellano, Italy; Tower cranes in Fontanafredda, Italy; and Pick and Carry cranes in Brisbane, Australia. These businesses will benefit from dedicated teams and will have the resources to focus on the priorities that are important to you: product innovation, responsive technical support, and world-class parts support. Along with Aerial Work Platforms (Genie), Materials Processing and Terex Utilities, these businesses will continue to be important parts of Terex.”

Koichi Tadano also sent a letter to Tadano customers which is carried in full below:

“Tadano Ltd. announces the approval by its board of directors to enter
into an agreement with Terex Corporation, headquartered in the state of Connecticut in the United States, for a stock and asset acquisition of the Demag Brand Crane Business, headquartered in Germany. The agreement includes the stock acquisition of 8 subsidiaries of Terex, as well as the acquisition of certain assets related to the Demag Business.”

“Through the acquisition of Demag, Tadano further seeks to meet customer needs with the addition of lattice-boom crawer cranes to our product lineup, as well as the enhancement of our line of all terrain cranes. We aim for a greatly expanded global presence as we strive toward our goal of becoming No. 1 worldwide in the lifting equipment industry.”

“We plan to complete this acquisition, upon receipt of all necessary approvals in each related country, sometime during mid-2019. At the current time, the information contained in the release is the entirety of what we are able to disclose. Concrete plans for product branding and development will be announced at a later date and time.”

“This acquisition is part of Tadano’s efforts to realize our long-term goal of becoming No. 1 worldwide in the lifting equipment industry. In addition to these new efforts, Tadano will continue providing the products and services that our valued customers have come to trust and demand.”

Koichi Tadano