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Volvo Construction Equipment set to acquire hauler business from Terex

Volvo Construction Equipment has announced that it has agreed with the Terex Corporation to acquire the hauler manufacturer Terex Equipment, including related assets and intellectual property.

Volvo Construction Equipment has announced that it has agreed with the Terex Corporation to acquire the hauler manufacturer Terex Equipment, 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, which manufactures and sells rigid haulers under the Terex brand in China. NHL is listed on the Shanghai Stock Exchange.

In 2012, the businesses in the acquisition (excluding NHL) had net sales of about USD 370m and an operating income of approximately USD 33m.

In the first nine months of 2013 net sales amounted to about USD 172mnd operating income was approximately USD 5.5m. The holding in NHL will likely be accounted for using the equity method in accordance with IAS 28 (one-line consolidation). The purchase consideration amounts to approx. USD 160m on a cash and debt free basis.

The acquisition includes five models of rigid haulers, with payloads ranging from 32 to 91 tons.

The deal also sees a further three models of articulated hauler added to the Volvo portfolio, with payloads ranging from 25 to 38 tons.

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.

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