THE BOARDS OF DIRECTORS of Cargotec and Konecranes on Thursday approved a plan to merge the companies into a “customer-focused global leader in sustainable material flow”.
The proposed merger is set to create a supplier of cranes and other cargo-handling equipment with illustrative combined operating profits of about 565 million euros and combined annual revenues of about seven billion euros, based on their financial statements for 2019.
Ilkka Herlin, the board chairperson at Cargotec, viewed that the merger presents an excellent value creation opportunity for not only the businesses, but also for global trade. “The future company will be well-positioned to utilise these opportunities and create strong value for its customers, employees and shareholders,” he envisioned in a press release.
His assessment was echoed by Rob Smith, the CEO of Konecranes: “The future company will be a global leader with its unparalleled product range, global service network, industry-leading intelligent technology and […] unwavering commitment to safety.”
The combined company will set out to initially achieve a comparable operating profit of at least 10 per cent, supported by synergies of around 100 million euros a year within three years of the merger’s completion.
The merger plan, however, may not be rubber-stamped by antitrust authorities, reminded Helsingin Sanomat.
Erkki Vesola, an analyst at Inderes, pointed out to the daily newspaper that the merger may appear problematic from the viewpoint of competition authorities because both companies are strong particularly in the area of port operations.
“The companies are the world’s second and third in the field. This won’t be a walkover,” he gauged.
The transaction will also be subject to a review by the European Commission, Sanna Syrjälä, the director of merger control at the Finnish Competition and Consumer Authority (KKV), stated to Helsingin Sanomat.
“This deal has effects around the world, meaning the corporate transaction does not affect only the domestic market in Finland,” she reminded.
Aleksi Teivainen – HT