Volvo Construction Equipment (Volvo CE) has announced that it is buying Terex’s off-highway hauler business for around $160 M (£98M).
The deal, which is subject to regulatory approval, includes Terex’s main production facility in Motherwell, Scotland, and both the rigid and articulated hauler ranges. It also includes the distribution of haulers in the US, as well as a 25.2% holding in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures and sells rigid haulers under the Terex brand in China.
Volvo CE president Pat Olney said: “This is a strategic acquisition that offers Volvo CE considerable scope for growth,” adding that the introduction of rigid haulers into the range will extend Volvo CE’s position in light mining. The acquisition includes five models of rigid haulers, with payloads ranging from 32t to 91t, and three models of articulated hauler with payloads ranging from 25t to 38t.
In 2012, the terex hauler businesses (excluding NHL) had net sales of approximately £370M (£226M) and an operating income of around $33M (£20M). In the first nine months of 2013 net sales amounted to approximately $172M (£105M), and operating income was approximately $5.5M (£3.4M).
If approved, the acquisition will add around 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 deal is expected to be finalised during the second quarter of 2014.