Volvo Construction Equipment To Buy Hauler Business From Terex Corp.

(RTTNews) - Volvo Construction Equipment or Volvo CE (VOLVY.PK) has agreed with the Terex Corp. (TEX) to acquire the hauler manufacturer Terex Equipment Ltd including related assets and intellectual property. The agreement includes the main production facility in Motherwell, Scotland and two product ranges that offer both rigid and articulated haulers. Also, it includes the distribution of haulers in the U.S. and a 25.2% stake in Inner Mongolia North Hauler Joint Stock Co. or NHL, 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 around $370 million net sales and an operating income of some $33 million.

The purchase comprises five models of rigid haulers, with proven designs and payloads ranging from 32 to 91 tons. The launch of rigid haulers would extend Volvo CE's position in light mining; an industry area that is complementary to general construction, oil & gas, aggregates & 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. If approved, the transaction adds about 500 employees to Volvo CE's existing workforce, also allowing for the continued use of the Terex brand name on the relevant machines for a transitional period.

The transaction is likely to be finalized in the second quarter of 2014.