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UPDATE 2-Terex clinches 68 percent Demag stake
July 1, 2011 / 2:36 PM / 6 years ago

UPDATE 2-Terex clinches 68 percent Demag stake

* 67 pct of Demag shares voted for Terex offer

* Offer for Demag Cranes ended on Thursday

* Final tally of acceptance yet to be determined

* Terex shares up 3.7 percent; Demag up 1.1 percent (Adds industry background, CEO comments)

By Edward Taylor and Soyoung Kim

FRANKFURT/NEW YORK, July 1 (Reuters) - U.S. construction machinery maker Terex Corp (TEX.N) has secured a 68 percent stake in Demag Cranes AG D9CGn.DE following its sweetened $1.4 billion offer for the German manufacturer.

The combination of Terex and Demag will generate annual revenue of about $5.8 billion and give the U.S. company added scale in Europe and emerging markets, especially in China.

Demag recommended last month that its shareholders accept the offer after Terex raised its bid to 45.50 euros per share in cash from 41.75 euros, valuing the company at 963 million euros ($1.4 billion). [ID:nL6E7HM01V]

Terex shares were up 3.7 percent at $29.51 in afternoon New York Stock Exchange trading. In Germany, shares of Demag, which makes industrial and port cranes and offers other companies maintenance services, rose 1.1 percent to 45.39 euros.

A preliminary tally indicates about 67 percent of the outstanding shares were tendered by the offer’s expiration date on Thursday, exceeding the minimum acceptance level of 51 percent, Terex said on Friday. It had previously purchased a stake of about 1 percent.

Increased global manufacturing is fueling demand for freight transportation. Demag’s maintenance services business, which provides a buffer during an economic downturn, also attracted Terex.

“The success of our offer demonstrates the confidence in the compelling industrial rationale of this deal and the growth opportunities for both companies,” Terex Chief Executive Officer Ronald DeFeo said in a statement.

Demag shareholders who have not accepted the offer by Thursday’s deadline can tender their shares during an additional acceptance period of two weeks, after the release of the final tender results.

The completion of the offer remains subject to several conditions, including clearance by the European Commission. (Reporting by Edward Taylor and Soyoung Kim; Editing by Lisa Von Ahn)

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